The grim declaration last week by Michel Barnier, the EU’s chief negotiator, that the Brexit negotiations are at an impasse has sparked renewed talk in government and parliamentary circles about the feasibility of Britain crashing out of the EU in March 2019 without any deal on its future relationship. This frightful prospect should be stifled once and for all. It encourages the dangerous illusion that the UK can somehow unilaterally sever its EU ties without paying an intolerably high price, and not only financially. And it is wholly irresponsible in plain political terms. Neither in the 2016 referendum nor in last June’s election did voters give Theresa May a mandate to sacrifice Britain’s economic security on the altar of Conservative party unity.
Why are we even talking again about a “no deal” outcome? Having repeatedly spouted her “no deal is better than a bad deal” mantra, May eventually dropped it because it was so self-evidently untrue. Since Brexit became their party’s official policy, the Tories have followed a painful learning curve about what it actually entails. A deluded rump of hard Tory Brexiters remains in stubborn denial. They inhabit a lost world where Britain still rules the waves, Johnny Foreigner bends the knee, the Daily Mail and Rudyard Kipling articulate the nation’s superior values and hard times, especially when experienced by the lower orders, are character-forming.
At least these relics are consistent in their wrong-headedness. In contrast, a majority of Tory MPs voted Remain, then swallowed their objections for the sake of party unity and continued power. They knew ditching the EU was a bad idea and now, after slowly coming to understand the consequences, they know their first instinct was right. What aspect of this accelerating disaster need we call in evidence? The ongoing loss in value of the pound in your pocket is one sobering measure. The rise in inflation, consequent on higher import costs, is another. Or look at the damaging slump in productivity and GDP growth relative to nearly all 27 EU members and resulting wage stagnation and falling living standards.
These damaging effects of the downward spiral into Brexit will only intensify should a “no deal” exit occur. The immediate imposition, for example, of EU tariffs on British exports, ranging from 4% to 40%, would be massively disruptive. Among the hardest hit would be the car industry, the UK’s fastest-growing exporter of manufactured goods, according to a study by the Centre for European Reform. Sir Martin Donnelly, former permanent secretary at the Department for International Trade, was clear in a BBC interview that Britain’s services exports, dependent on European markets, will suffer disproportionately should “no deal” occur. Business leaders and City analysts are already predicting a jobs and investment exodus, starting in January, if there is no agreement by then on a transition period. Imagine the panic if a “no deal” outcome is still being floated in the out-of-touch Westminster bubble come next spring.
“No deal” means the trashing of European and British citizens’ rights, plus potential mayhem at Britain’s borders, ports and airports – and not only on the faultline between Northern Ireland and the Republic. “No deal” is the trigger for the mayhem, perhaps temporary, perhaps not, that would ensue once it was realised that many UK products were no longer accredited for sale across the EU, British-based airlines could no longer fly European routes, EU doctors and nurses in the NHS had lost their legal status and common regulatory standards covering basic banking, financial services and medicines had lapsed.
It is a nightmare scenario – and totally avoidable. So let us dismiss this foolish talk about “no deal” and recognise instead the real, shabby reason why the notion bubbled up again last week. The reason is the embarrassing, breathtaking incompetence of May and her ministers, who cannot agree basic negotiating positions from one day to the next, fall out in public, pursue personal vendettas through the newspapers (the latest targeting the “saboteur” chancellor, Philip Hammond) and refuse to publish damning internal reports on Brexit’s negative impact on key industries. For all David Davis’s bluster, he has made almost zero progress in Brussels. Yet in a vain attempt to hide their divisions, doubts and indecision, ministers blame their European counterparts and suggest throwing in the towel. Hammond’s description of the EU as the “enemy” shows how desperate even more sensible ministers are becoming.
A more accurate picture of the state of the negotiations looks like this: Barnier is a sincere if dour interlocutor who is increasingly frustrated with British dithering. His hands are, for the large part, tied by the tight stage one parameters set by the council of ministers (the 27 national governments). Even if he wanted to move beyond the three initial issues of money, citizens’ rights and Northern Ireland, he has no mandate to do so. When Barnier says insufficient progress has been made, he is largely correct. Britain could have settled the questions of citizens’ rights at the outset, but May chose, foolishly, to use it as a negotiating lever. This has backfired. Nobody seems to have a clue what to do about the Irish border. And as for the divorce bill, the reality is that the government knows it will have to pay a substantial sum eventually, maybe £50bn over, say, three transitional years. So why not give the required cash assurances now (with the usual caveats about unforeseen factors) and move on?
The mortifying answer is that May is scared about how Boris Johnson, the Daily Mail and the hard Brexiters might react.
The EU’s approach to the negotiations has been far from perfect. There are divisions there, too, including elements in Paris and in Brussels, around the commission’s unhelpful president, Jean-Claude Juncker, which want Brexit to be painful and expensive. It is clear that, as ever, EU decision-making is ponderous and unwieldy. Getting all 27 governments to agree that talks on future trade relations can begin, as Britain had hoped would happen this month, is a big task, hampered by the usual inertia and absence of consensus.
But make no bones about it: the fault for the current stalemate lies mostly on this side of the Channel. When, for example, will the hard Tory Brexiters get it through their heads that Angela Merkel’s weakened German government is not suddenly going to cave in to British demands because its car manufacturers fear a short-term loss of sales? They have grossly overestimated British leverage. When will they drop their insulting, puerile cliches about the British lion and the Spitfire nation? Most of all, they must stop telling the public you can jump off a cliff and not get hurt. People are not daft, even if our leaders are. “No deal” is not an option. May and her ministers must accept the consequences of their pro-Brexit actions, stop squabbling and find a way to make the negotiations work.
