Brexit

The Observer view on the many perils of a no-deal Brexit| Observer editorial | Opinion

For months, trade experts, business organisations – and even the Treasury – have been warning about the calamity of a no-deal Brexit. And for months, the prime minister and most of her cabinet have shrugged those warnings off. “No deal is better than a bad deal” is the standard refrain.

The Observer is the world’s oldest Sunday newspaper, founded in 1791. It is published by Guardian News & Media and is editorially independent.

No more. Last Thursday, the government finally published the first tranche of no-deal notices, which set out advice on preparing for a no-deal Brexit. The government didn’t admit that no-deal would be a disaster in so many words. “Our institutions will be ready for Brexit – deal or no deal,” came the reassurance from Brexit secretary, Dominic Raab. But the drily named “technical notices”betray a different reality: the huge upheaval businesses and consumers will face in the event of a no-deal Brexit.

For every business that exports, there will be layer upon layer of additional bureaucracy. Pharmaceutical companies have been advised to stockpile medicines for at least six weeks. Consumers may face more expensive credit card transactions with retailers on the continent, and organic farmers a nine-month block on exports to the EU as they wait for the UK organic certification bodies to be approved by the EU. These are the just some of the gritty realities that will together produce the £80bn annual price tag of a no-deal Brexit estimated by the Treasury.

The government’s own scenario planning rubbishes two of the main arguments Brexiters advanced during the referendum campaign. Voters were told that leaving the EU would allow Britain to take back control. But the technical notices make clear just how much control Britain would give up in a no-deal Brexit. In order to maintain supplies of food, energy and medicines, the government says it will have to shadow EU regulations. This is the first admission that – whether we leave without a deal or remain part of the single market – Britain will shift from rule-maker to rule-taker as a result of Brexit. And that’s before we try and independently forge trade deals with giants such as the US, which will insist on imposing its laxer regulations in areas such as food on British consumers.

The reality is that the Brexiter fantasy of regaining control harks back to a time when Britannia ruled the waves. There’s no such thing as 19th-century-style national sovereignty in an interconnected world where economic success is built on international trade. The future lies in more, not less, intergovernmental co-operation and the European Union – for all its faults – is the most functional model of that. The reality is that the UK is giving up membership of the world’s most significant trading bloc – in which it has exerted real influence for a decade – in exchange for having its terms of trade dictated by other governments.

Second, Brexiters promised that shunning Brussels would lead to the slashing of red tape. But a no-deal Brexit will create a huge increase in bureaucracy, and not just for businesses. Raab has said it would require up to 16,000 extra civil servants – half the number of staff employed by the European commission.

Meanwhile, the impossible conundrum of what to do about the Irish border remains unresolved. And Herman Van Rompuy, former president of the European council, warns in the paper today that a no-deal Brexit could potentially risk the unity of the United Kingdom.

The crazy pretence that all will be well in the event of no deal – the equivalent of the government sticking its fingers in its ears – is the product of the impossible political bind Theresa May finds herself in. The hard right of her party want her to “chuck Chequers” and are actively lobbying for no-deal chaos. The tightrope she walks between keeping them on board, while simultaneously moving negotiations with the EU forwards, becomes ever thinner as the article 50 deadline draws closer.

And the technical notes underline the extent to which the Chequers plan falls short as a starting point for those negotiations. It would require the EU to pick apart its four freedoms, which it has said it is not prepared to do.

The British negotiating strategy rests on the idea that the EU has just as much to lose as the UK from no deal, forcing it to allow the UK to cherry-pick the bits of the single market it likes. But in saying that Britain will unilaterally adopt European regulations in the hope that the EU will return the favour, the technical papers put paid to that strategy: the reality is that the EU is in a stronger position and can dictate the terms on which it would do so.

Raab implied the blame for any no-deal Brexit would lie with the EU. But the public won’t buy this: most voters say they’d blame the government for a bad deal. That’s the problem with mainstream politicians adopting a populist-lite strategy. Once they’ve bought into the idea of a scapegoat – and taken it out of the equation, on leaving – the blame for the ensuing chaos will rightly and squarely be directed back at them. Populists such as Nigel Farage will be standing by to capitalise on it. Theresa May is about to learn a hard lesson: you can’t beat the populists by aping them. And it will be ordinary Britons who suffer the consequences.

Source

neallesh@yahoo.co.uk

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