[...] It has been a year of political turmoil and policy confusion, because the UK voted for the biggest international dislocation in its postwar history without having a plan. As a result, a diminished Britain has frittered away the confident, outgoing spirit of the 2012 Olympics and the diamond jubilee, while the world looks on bemused.

 

The recent general election clarified nothing, but it has a silver lining. Although Brexit was not at the top of most voters’ minds, by denying the government a sweeping majority they have prised open the stranglehold that a narrow group was exerting over discussion of our options. We have a new opportunity for thoughtful debate about what form of Brexit we should pursue.

 

Yet debate is not enough. With the two-year clock of Article 50 already ticking, we need to press ahead with the negotiation in good faith, respecting the referendum result. The other 27 members of the EU have agreed an agenda and a negotiating mandate. The UK so far has no discernible strategy, but has accepted the EU’s view that progress should be made on the terms of separation before we discuss our future relationship with them. This makes sense in two respects. First, because it was Britain which asked to leave; second, because we don’t yet know ourselves what kind of relationship we want.

 

This summer we should work towards agreement on the status of British and EU nationals living abroad in the EU, the principles for a financial divorce settlement and the border issues between Ireland and Northern Ireland. If we can make progress on these points, there is no reason why negotiation of the future relationship should not begin in the autumn, when we will have a newly elected German chancellor — and, one hopes, a clearer UK policy. If we cannot make progress, we will know that we are heading for the cliff edge of no agreement, and government and business can plan accordingly.

 

When it starts, the negotiation about the future will be vast and complex, covering Britain’s ties with the EU and its member states in politics, security, economics, foreign policy, education, travel, science, agriculture and much more. It is inconceivable that this can be completed, ratified and implemented by March 2019. Part of a pragmatic approach must be to agree as soon as possible the parameters of a transitional regime after our formal departure. This is vital for business.

 

There are three broad scenarios for the post-Brexit economic relationship. First, the UK stays in, or close to, the EU single market, perhaps via the European Economic Area. Second, we leave the single market but remain in a full or partial customs union. Third, we exit the EU’s economic structures and seek the best preferential trade and economic partnership we can get as a third country. None of these outcomes matches the economic benefits of EU membership. [...]

 

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