In pushing for a no-deal Brexit, the Tory right have handed Remainers a gift

There is now no version of Brexit that can win a Parliamentary majority, says Best for Britain's Anatole Kaletsky.

The government’s campaign to prepare for a ‘no deal’ Brexit launched under pressure from Boris Johnson and David Davis is the best news for Remainers since Theresa May’s failed election last year.

The Treasury – frustrated by the ridiculed heaped on carefully balanced, abstract assessments on the economic impact of Brexit – will now have the chance to spend millions on mailshots to businesses and voters with a very practical and unequivocal message: whether you think Brexit will ultimately be wonderful or dreadful, you must now start spending serious money to prepare for the huge costs and disruptions that a no deal Brexit threatens to produce by next March.

The no-deal disaster

The 250,000 small businesses due to receive the government’s weekly “no deal bundles” will be urged to hire more staff and change their computer systems to prepare for new customs regulations.

Transport firms will be warned of border delays and the risk that British licences will not be valid in Europe. Farmers and fishermen will be told that they could temporarily lose all their export sales. Travelers will be instructed to buy health insurance and to leave enough time for visa applications to go to France.

Such warnings are unlikely to boost the popularity of Brexit, and the no deal campaign will score many more own-goals. Worse than the border delays, customs duties and flight disruptions will be the legal and regulatory quagmires threatened by no deal.

After a no deal Brexit, British businesses and citizens would find themselves without many legal and commercial rights acquired in the 45-years of EU membership: special trade deals with dozens of non-EU countries, operating permits for airlines, visa-free travel rights, safety standards on everything from food and toys to aircraft engines and medicines, regulations on sales of financial, legal and internet services – this list could go on (literally) for thousands of pages.

This thicket of regulations would stop British business, at least temporarily, not just in Europe but in other markets covered by trade deals negotiated for Britain by the EU.

Britain would, of course, strike new international agreements after Brexit. But these international agreements do not exist yet and neither do the British regulations that would replace EU oversight of aircraft safety, medical testing and so on.

No implementation period

That is why Mrs May’s first big idea in the Brexit negotiations was an “implementation period”, when Britain would still be bound by European regulations and treated by other countries as if it were a member of the EU.

May’s proposed 21-month period was widely viewed as too brief for all the necessary deals and regulations to be rewritten, but it offered at least the hope of orderly transitions for some important sectors, such as cars, aircraft and pharmaceuticals. No deal would, by definition, mean no implementation period and no orderly transitions for anyone.

No deal would also hurt Europe, but much less severely that Britain. Brexit will have no effect on Europe’s trade with the rest of the world and even European exports would have no regulatory problems even in Britain, because EU standards are already incorporated in British law.

Meanwhile, Europe after No Deal would be slow to recognise British standards, as would other countries such as America, Japan and China.

The upshot is that no deal would put Britain in the position of an angry divorcee who storms out of the house, gives up custody of the children and loses control of the joint bank account – and then refuses to talk to lawyers. For the EU, by contrast, no deal would mean a bitter end to a long relationship, but everyday life could go on.

The government’s no deal preparations will make this asymmetry increasingly clear. So how will businesses respond? Will they recruit staff, reprogram their computers and change their business strategies to prepare for the No Deal bust-up? Or will they decide not to waste their money and time on something so obviously self-destructive that no government could allow it?

No Parliamentary majority

Finally, how will parliament and the EU negotiators be influenced by the preparations for a no deal scenario? Since it is literally impossible for Britain to be fully prepared for no deal by next March, a parliamentary majority for this option is inconceivable.

The EU knows this – and therefore has no incentive to offer the Brexiteers’ real objective: a hard Brexit that allows a transition period, but exempts Britain from EU budget contributions and regulations.

In short, the no deal shenanigans will not affect the outcome of the EU negotiations: some form of Soft Brexit, whereby Britain continues paying into the EU budget and following most EU rules. All the Brexiteers have changed by opposing Mrs May is the parliamentary arithmetic facing Soft Brexit.

A dozen or so Labour Brexiteers will now have to vote for Soft Brexit to get it through Parliament because, as Eloise Todd of Best for Britain says: “It is now abundantly clear that Soft Brexit will satisfy neither Levaers nor Remainers.”

Moreover, Jeremy Corbyn can see that an unholy alliance of Labour with Tory no-dealers could trigger a general election. Thus there is no version of Brexit that can win a Parliamentary majority.  

Could Mrs May break this stalemate? I think she could. Imagine a Brexit package that bundled together whatever deal Mrs May proposes with a final referendum that either ratifies this deal or keeps Britain in the EU.

This legislative package would easily pass parliament with Lib Dem, SNP and moderate Labour votes, despite opposition from Corbyn and the diehard Brexiteers. So let us thank Boris Johnson and David Davis. Their campaign for a no deal Brexit could end up delivering a People’s Vote.

Anatole Kaletsky is an economist, and sits on the board of Best for Britain.

Comments are closed.