IntroductionThe following scenarios are narrative sketches of possible future worlds. They have been designed with the following question in mind:
“What will the UK government’s strategic priorities be on 1 July 2019?”
In the opinion of the scenario developers, the key drivers of the UK’s strategic priorities in 2019 will be: UK policy, the European Union, mainstream UK politics, the UK economy, political extremism, UK regionalism, the international scene and the global economy including international trade. Each of the following scenarios is built on a slightly different set of assumptions concerning these drivers, and is set in the middle of 2019.
The first scenario is the 'baseline', corresponding to a set of assumptions that (in the view of the developers) are most plausible. However, it is not a forecast, and should not be considered in any sense 'likely'. The other four scenarios represent plausible alternatives based on changed assumptions. These should be assumed to follow the baseline where not explicitly stated otherwise.
Baseline Scenario - Silver Linings
|Prime Minister May.|
Source: UK Home Office.
Since then the UK has had mixed success in developing new trade arrangements with Commonwealth countries, the US, China and India. Cuts in corporation tax and other incentives have maintained and even increased inward investment from some sources, but it is recognised that the UK economy will remain dependent on relatively-free EU trade for the foreseeable future. Throughout 2017 and 2018 the UK Government was involved in sometimes-heated negotiations with EU members over low-tariff trading arrangements to protect the strength of British exports to the common market. France and Germany are losing patience with the UK’s hard stance on trade negotiations and freedom of movement, but Scandinavian countries and the Netherlands are sympathetic to the UK's position. Overall, little progress has been made. A three-month extension to secession talks has been granted, moving the deadline for the UK exiting the EU to the end of 2019.
The EU remains politically unified. Despite calls from Eurosceptics within the Netherlands and France for exit referenda, there have been no copycat plebiscites in other EU countries. EU reform has not progressed significantly and the Eurozone continues to adapt to the UK's decision to leave. The Global economy continues to enjoy positive growth, but the Eurozone is seen as a more risky investment area. In this context the UK’s decision to decouple from Europe is seen as a potential future benefit and there are signs that it is beginning to see some diverted investment. However, the pound and the euro both remain volatile and are yet to recover to pre-referendum levels against the US dollar.
At home the UK is feeling the effects of a mild recession, but analysts are predicting a return to growth once EU negotiations are completed. The finance and manufacturing sectors have suffered the most from the increased costs of international collaboration and reduced exports to traditional trade partners, but confidence is starting to build again. The Government has been forced to continue its regime of austerity, cutting public services in the face of reduced tax receipts. Unemployment has steadily risen from 5% in 2016 to a peak of 8% in late 2018, but the number of jobless fell in the last quarter. Apart from stagnating wages, those still in work have noticed little difference. Pragmatism and necessity have led to the maintenance of much EU law, and the creation of new legislation tends in practice to be synchronised with that of the EU. UKIP continue to be vocal about the EU meddling in UK affairs and Westminster's inability to replace EU legislation with new UK law. Some Eurosceptics continue a narrative about the 'Brexit dividend', while others are beginning to become frustrated in light of Westminster’s apparent impotence to exploit on its hard-won 'sovereignty'.
|Scottish Independence on the cards.|
Source: Scottish Government.
|US and Russia stalemate. Source: Russian Government.|
Policy ImplicationsUnder this scenario, the UK government’s main strategic priorities are to finalise the terms of Brexit and manage its economic impact. Most economic and foreign policy is focused on seeking to exploit the opportunities offered by the UK’s additional freedoms, make favourable trade deals with alternative partners, and establish a business and regulatory climate that will make the UK a relatively more-attractive market for international investors and consumers. However, the UK remains significantly dependent on trade with the common market, and establishing the terms under which we exchange goods, services and people with this market is the UK’s overriding concern.
Conflict in the Middle East continues to displace people to Europe, forcing the UK government to develop strategies to reduce the flow of migrants and refugees. At home pressure is mounting to tackle extremism and radicalisation and the movement of jihadist fighters. Finally, the UK must prepare for Scottish independence and develop policy and legislation to support further devolution of powers to regional assemblies and local government.
Scenario 2 - Business as EUsualThis scenario differs from the baseline in our assumption about the shape of the UK’s exit from the EU. In this scenario, Theresa May wins a general election in April 2017 on a mandate to move the UK into the EEA along the lines of the Norwegian model. A new government department - the Department for EU Transition - is created to pursue this agenda. However, the political importance of curtailing immigration means that the UK cannot adopt this model wholesale. The final terms of the agreement allow the UK to impose quotas on immigration from the EU (the intention being to manage this through a points-based system), but the UK does not have full access to the single market for services. The most significant concession the UK has had to make is to accept a prohibition on UK-based companies dealing in euro-denominated financial assets, a trade which currently earns the UK billions of pounds a year.
Source: Flickr user Steve Punter.
However, unlike the baseline, in this scenario there is somewhat less support for regionalist parties due to the relatively-limited practical impact of leaving the EU. The Scotland referendum, due to be held later in 2019, is looking like a close-run thing rather than a dead cert for independence, given the uncertainty about how quickly Scotland could join the EU and under what terms. Meanwhile, due to sensitivities surrounding the UK’s border with Ireland, border controls are primarily implemented in mainland British ports and airports servicing travellers from Northern Ireland, and tensions there continue to be mediated through political rather than violent processes. In comparison to the baseline, UK relations with the EU are stronger as a result of a satisfactory conclusion of negotiations within the Article 50 window, and the resultant dissipation of uncertainty means that the economic impact of Brexit is slightly lessened. But maintaining the long-term competitiveness of the UK’s services sector presents policy challenges.
Policy ImplicationsUnder this scenario, the UK government’s main strategic priorities are to manage the economic impact of Brexit. Most economic and foreign policy development is focused on seeking to exploit the opportunities offered by the UK’s additional freedoms, make favourable trade deals with alternative partners, and establish a business and regulatory climate that will make the UK a relatively more-attractive market for international investors and consumers. Effective policy levers to control the scale and nature of EU and non-EU migration are still being sought.
Scenario 3 - These fractured isles
|No Surrender. Photo: Rossographer|
Frequent walkouts and resignations on both sides make NI politics fractious and unpredictable. The NI assembly is paralysed by this single issue. Irish nationalism is on the rise and it is met by increased unionist sentiment. Some parts of Belfast are descending back into regular outbreaks of sectarian violence and there is a sense that the turmoil is spreading. The US attempts to engage with the situation through arms-length mediation, but it has little success in stemming violence. For the time being, NI security and police forces are able to contain and manage the situation, but the UK Government is making contingency plans to support local forces by deploying military units - if called upon - to assist with peacekeeping. European efforts to become involved in any negotiations are met with strong criticism from Unionists who perceive the EU as ‘meddling’ and encouraging the Republican cause.
|Scottish Independence. Source: In Defence of Marxism.|
Scottish nationalism has led to overwhelming support for the SNP. The imminent referendum on Scottish independence is considered to be a foregone conclusion. UKIP is emboldened as the newly re-branded “UK Party” and is stealing support from the right and left of British politics. It maintains a compelling narrative that England is under-represented in Government often citing reduced government spending in poor areas as a sign of neglect. Support for the two main parties is at an all time low in modern political history.
Policy ImplicationsIn this scenario in addition to the need to respond to a deepening recession, UK government policy is focussed on dealing with the worsening security situation in Northern Ireland. There is also a lot of work to do in order to prepare for Scottish independence, which is unlikely to be an amicable process. The issue of managing two new borders has uncovered a lot of practical and legislative challenges. Westminster must also consider how to devolve further powers to the regions and operate in a more decentralised fashion.
Scenario 4 - Should we stay or should we go?This scenario is characterised by political uncertainty. It is 2019 but the UK has not yet invoked Article 50. A general election in April 2017 produced a hung parliament and a Conservative minority Government unable to form a governing coalition. The mainstream political parties have fractured into internal blocs: Labour along broadly ‘new’ and ‘old’ lines, and the Conservatives into the ‘small c’ conservatives and the free-market ‘small l’ liberals. Despite the mandate from the referendum, the European Union Bill of 2017 was narrowly voted down by parliament - chiefly by a coalition of Remainers-on-principle, MPs of strongly Remain constituencies, and MPs who now believed the conditions had changed and that for the good of the country the referendum decision (with its relatively-slim margin) should not be acted on. The Prime Minister has triggered a general election to be held at the end of 2019 with a view to ending the deadlock, but the outcome is highly uncertain. Calls for ‘national unity’ have gone unheeded and finding any common foundations for a stable coalition has been impossible.
|Scotland looks abroad. Source: US Dept of State.|
Policy ImplicationsIn this scenario, the Government is struggling to pass any new legislation or set policy direction. The civil service lacks direction and certainty of instruction. Policy U-turns are a matter of course. The UK government’s main strategic priorities are to tackle the severe recession, reduce public expenditure and develop options for a new relationship with the EU. Managing increasing levels of civil unrest have also become a focus of government activity.
Scenario 5 - On the Brink
|President Trump. Source: Flickr user Michael Vadon.|
|Disquiet amongst young Muslims.|
Source: Flickr user Jamie Kennedy.
|The Dragon and the Bear. Source: Kremlin Press Office.|