Brexit’s Perilous Endgame / New Statesman

Remember all the Brexiteers’ promises in 2016? “Do you seriously believe that [the EU] would put up tariffs against UK produce of any kind, when they know how much they want to sell us their cake, their champagne, their cheese from France? It is totally and utterly absurd,” Boris Johnson proclaimed. “The day after we vote to leave we hold all the cards,” Michael Gove declared. A free trade agreement with the EU “should be one of the easiest in human history”, Liam Fox bragged. Our “EU neighbours” would be “clambering over themselves to secure a free trade deal with their biggest market”, Matthew Elliot, the former head of the Vote Leave campaign, assured us.

Four and a half years on, Britain is on the cusp of a catastrophic no-deal Brexit. As the government plays a perilous game of brinkmanship by threatening to guillotine talks unless the EU makes further concessions, we are barely 70 days away from leaving the world’s largest trading bloc without any agreement to replace all those immensely complex trading arrangements built up over the past 47 years.

It is all the EU’s fault, of course. “They want the continued ability to control our legislative freedom, our fisheries, in a way that is obviously unacceptable to an independent country... they have refused to negotiate seriously,” Johnson complained in his Downing Street statement on 16 October. 

But the Prime Minister’s finger-pointing overlooks that he did much to sour the atmosphere by likening the EU’s political project to that of Nazi Germany and deriding its leaders; that Theresa May’s government triggered Article 50 of its own volition, and then wasted two years trying to agree its own negotiating stance; that in July last year Johnson replaced Olly Robbins, our chief negotiator, with an inexperienced and aggressive Brexiteer, David Frost; that Britain rejected the EU’s offer to extend the one-year transition period that ends on 31 December; and that Johnson squandered valuable EU trust last month by threatening to renege on last year’s withdrawal agreement.

Beyond that, did the Brexiteers not foresee that the EU might not easily give in to the UK’s demands? Is it not the job of politicians to anticipate the potentially adverse consequences of their actions? Did they not understand that securing continued tariff-free access to the single market would inevitably require the UK to accept the EU’s rules? Did they really believe that Brussels was going to reward us for leaving the EU with a free trade agreement as advantageous as our present position? As Johnson’s father, Stanley, observed in August, anyone who thought so was living in “cloud cuckoo land”.

A deal – albeit a skeletal one – is still possible, though time is now desperately short. The divide between the two sides on the outstanding issues, primarily state aid and fisheries, is not unbridgeable (the strict state aid rules that we now want loosened were fought for by Margaret Thatcher in the 1980s). Having won last year’s general election by boasting of his “oven-ready deal” and ability to “get Brexit done”, Johnson would very much like a deal that he could portray as a victory for his tough negotiating stance, and he was careful not to rule out further talks in his statement.

But the EU may well decide to stand firm and call Johnson’s bluff, knowing that trading on “Australian-style terms” (the government’s euphemism for a no-deal Brexit, and one that ignores that Australia is seeking a free trade deal with the EU) would hurt the UK far more than its 27 member states. 

That is also a high-risk tactic because Johnson reached No 10 by defying and demonising the EU, not by capitulating to its demands. Moreover, he remains in thrall to his party’s Brexit zealots, who want the cleanest of breaks with Europe and seem to believe that the public would not notice the additional havoc of a no-deal Brexit amid the turmoil of the Covid-19 pandemic. 

There is alarming scope for miscalculation here, and the stakes could hardly be higher. The government’s own contingency planners fear shortages of food, medicines and fuel, and civil unrest in the event of a no-deal Brexit. They predict chaos at our ports and queues of 7,000 lorries waiting to cross the Channel. Businesses already reeling from the coronavirus lockdown would face devastating tariffs, quotas, red tape and disrupted supply lines, and few have made the necessary preparations. The financial sector, which accounts for 6.8 per cent of the UK’s GDP, will lose the “passporting” system which permits it to provide seamless financial services to the EU. We might save a few fishermen, but our beef and sheep farmers would go bust. The cause of Scottish independence would receive another powerful boost.

In the longer term, analysis by the London School of Economics and UK in a Changing Europe shows the economic damage of a no-deal Brexit could be two or three times worse than that of coronavirus, cutting 8 per cent from the UK’s GDP over the next decade. A solitary trade deal with Japan (where are all the others we were promised?) hardly begins to compensate for the erection of trade barriers by the bloc that presently accounts for 43 per cent of our exports and 51 per cent of our imports.

Just as Johnson promised a quick and easy trade deal back in 2016, he now insists that the UK will prepare for a no-deal Brexit “with high hearts and complete confidence”, and that it will “prosper mightily as an independent free trading nation”. He says 2021 will be “a year of recovery and renewal”.

The Confederation of British Industry – along with 71 other British trade and professional organisations representing sectors ranging from aviation and agriculture to cars, chemicals and pharmaceuticals – does not share the groundless optimism and reckless insouciance of the inveterate gambler in No 10. They issued a joint statement on 18 October demanding “historical political leadership” because a swift trade deal “matters greatly for lives and livelihoods”. 

They added, almost plaintively: “After four years of debate, there must be a resolution.”