What if crashing out of the EU without a deal actually becomes the UK’s plan?
This week in the FT (€), Philip Stevens recalled the EU negotiation advice of Douglas Hurd, the UK’s Foreign Secretary under John Major. There is more to be gained from conciliation than from shouting argued Hurd, a sentiment I echo after years observing EU business.
Yet this week something akin to shouting is what the UK government has been doing, with Boris Johnson urging Theresa May to reject any Brexit bill, following on from offending plenty of people in Munich by talking of liberation from the EU, and evoking World War II rhetoric about François Hollande. Jean Quatremer argues that Johnson is unifying the EU against the UK, and he is quite right.
Meanwhile in the Houses of Parliament, the government is doing its best to resist a House of Lords amendment to the Brexit notification bill that would give both the Commons and the Lords a meaningful vote at the end of the Brexit negotiations – to force May back to the negotiation table if the deal the UK had struck was inadequate. FT has the background here (€). The government is trying to fight off this amendment, arguing that Parliament will get to choose between whatever deal May has brokered and no deal at all (essentially crashing out of the EU). Is it just May’s control-freakery causing her to oppose this Lords amendment, or something else?
Meanwhile others in the UK have been upping the ante as well. David Davis warned last week that the UK ought to prepare for an exit from the EU with no trade deal in place. Nigel Lawson underlined the point in a debate in the Lords. And these words were in Theresa May’s speech in January (full text here, quote is from close to the end):
But I must be clear. Britain wants to remain a good friend and neighbour to Europe. Yet I know there are some voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path.
That would be an act of calamitous self-harm for the countries of Europe. And it would not be the act of a friend.
Britain would not – indeed we could not – accept such an approach. And while I am confident that this scenario need never arise – while I am sure a positive agreement can be reached – I am equally clear that no deal for Britain is better than a bad deal for Britain.
Just a couple of days before May’s speech, Chancellor Hammond essentially threatened to position the UK as a tax haven if it did not get what it wanted in the Brexit negotiations, an approach that was not greeted optimistically on the other side of the Channel.
But what could all of this actually mean?
Throughout the Brexit process since the referendum I have been struck by the UK government’s chronic lack of attention to practicalities, to details. The government’s Brexit White Paper (PDF) published 17th February leaves major issues such as the Northern Ireland border (for more on the problems there, this is excellent from Peter Foster), devolution and Scotland, and passporting for banks largely untouched. From the impact on the airline industry, to parts of car engines, through to the complexity for ports of reintroducing customs checks, the UK government does not even seem to know what questions to pose, let alone to actually solve these very real everyday issues. That is not to say these problems could not be resolved – they are all, with enough goodwill and some (possibly considerable) costs, solvable – but the government, committed to Brexit to a tight timetable, lacks the ability to deal with the scale of the issues.
I had essentially – and now I fear perhaps wrongly – attributed these problems to a lack of competence and a lack of resources, and that, once confronted by the scale of the task after Article 50 is triggered and negotiations in Brussels actually begin, the UK government would then start to seriously engage. That scenario assumes that both sides negotiate in good faith, and both sides actually want an amicable exit agreement to be reached.
Now I am not so sure.
What happens if the UK government essentially comes to the point of view that any negotiated agreement cannot be presented as being in its interests, and instead wants to walk away? As Jolyon Maugham points out, this is not without its complexities from a legal point of view – but stopping it requires Parliament to intervene, not a foregone conclusion after the capitulation of the Commons on the Brexit notification bill. There is also the ideological motivation behind this option – it offers a symbolic freedom that appeals to the right of the Tory party, regardless of the chronic economic consequences.
The most important point is that communicating the walk-away option is actually quite easy for the UK government – they can blame an intransigent EU for failing to meet their demands, and the tabloids will back them. With Labour in disarray they govern without opposition within the UK, and could probably get away with it. The UK population currently opposes an exit without a deal but we are only at the start of even thinking about this as an option.
Now I am aware that this sort of approach is far from being the unified position of the UK government, a point Alexander Clarkson correctly makes. May, in her press conference at the European Council yesterday sounded more practical and conciliatory, while Hammond has more edge now (while back in the autumn he sounded as if he was more focused on the practicalities). I cannot tell what Johnson actually thinks ought to happen, but his approach is most definitely not helpful to build bridges to the rest of the EU, and indeed he is more adept at burning them. Meanwhile Fox is romantic who seems to think a dose of global free trade can solve anything. Davis has always been a bit of a maverick – which way would he jump here? Michael Gove, although not in government currently, would likely be a proponent of this – Cameron alleged he is in favour of “creative destruction”.
When I wrote in January that I feared there would be some sort of Brexit crunch, I was still at the stage of assuming both sides would see a negotiation failure as a catastrophe, and the practicalities would be what would make things tough. Now I am not so sure. Is the UK government side beginning to actively want things to fail and to then walk away? The very prospect is horrid, but from now on the EU side (and indeed the UK’s Brexit opponents, and proponents of a reasonable Brexit) have to keep it in mind.
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