07 July 2020

Federal Trust: In a mad Brexit world, “no deal” makes some kind of sense

The government has been surprisingly successful in avoiding public discussion of the disappearance on 30th June of its option to ask for an extension of the EU transition period beyond the end of the year. Other controversies have predictably diverted attention from Brexit in recent days.

But the government did its bit towards pre-empting controversy by briefing the gullible British media that a worthwhile “deal” between the UK and the EU was still possible even without an extension. The unyielding address by chief EU negotiator Michel Barnier of 30^th June on future European access for British financial services, and a stark warning from Chancellor Merkel that the EU must now prepare for a “no deal” Brexit point in a very different and more realistic direction. The prospect of any significant agreement being reached between Day One of Brexit on 1^st February and the end of 2020 was always remote. The arrival of Covid-19 extinguished even this possibility. The non-extension of the transition period makes “no deal” Brexit all but inevitable on New Year’s Day.

A number of “Remainer” groups such as the European Movement (but not the Labour Party under Keir Starmer) pressed for an extension of the transition period beyond the end of 2020. In making this argument, they were careful to stress that they were not contesting the underlying principle of Brexit, but merely attempting to ensure as smooth and advantageous a process as possible. The reasonableness of this distinction was undeniable. It was not, however, a distinction ever likely to commend itself to the radical Eurosceptics who dictate Conservative European policy.

Many such Conservative Eurosceptics would actively welcome a “no deal” Brexit, and the sooner the better. It would mark in their minds the most complete possible emancipation from the bonds of Brussels. The hope lingers in the minds of others that continuing pressure from London will persuade the EU to make significant last-minute concessions in the negotiations. Yet others had to be dragged into accepting the initial transition period until the end of 2020; they would regard its extension by Boris Johnson as a betrayal of all those who elected him.

No deal for ever

More importantly, the underlying political logic of the Leave campaign’s victory in 2016 has always pointed most plausibly to a “no deal” Brexit. Since then, successive Conservative governments have been criticised for not knowing what they were seeking to achieve in the Brexit negotiations. This criticism was misplaced. The referendum victory was based on a campaign of self-contradictory deceptions and fantasy. There was no possibility of constructing from these incoherent and unrealistic promises anything that would or could serve as a defensible negotiating position. Even before it was presented to the EU, any negotiating strategy adopted by a Conservative government would always be open to the plausible accusation in the UK that it was betraying one or other central aspect of the referendum mandate.

In so far as Dominic Cummings has any claim to the tactical genius his admirers detect in him, it was his 2016 realisation that two entirely different and contradictory rationales exist in British public opinion for leaving the EU.  There are those, probably including himself, who reject root and branch its values, institutions and economic presuppositions; for them, the more radical the break with the EU implied by Brexit, the better. But there are also those, probably more numerous, who fear that too distant and estranged a British relationship with the EU will be politically and economically damaging; for them a continuing close relationship with the EU after Brexit is central to the UK’s political and economic future. The Cummings recipe for success was to allow both camps to believe that they were voting for their version of Brexit, while at the same time suggesting that the UK could enjoy both versions.

The essential unrealizability of that mandate was more neatly summarised than he realised by Johnson in his oft-quoted aspiration to “have our cake and eat it.” When this slogan was confronted with the determination of the EU to ensure that seceding states had less cake to eat and could only eat it once, “no deal” Brexit emerged as the inevitable default outcome. The Conservative government’s Parliamentary weakness after 2017 forced it to accept the (in their eyes) unattractive Withdrawal Agreement as a prelude to Brexit on 31^st January this year. Now armed with a substantial Parliamentary majority, it is now able and condemned to follow the path of a “no deal” Brexit, because no negotiated accord on Brexit can ever fulfil the wilfully incoherent mandate of 2016.  Johnson’s predecessor Theresa May struggled vainly to construct some coherence and reality for the fundamentally flawed Brexit process through her Chequers agreement of 12 July 2018. Boris Johnson by contrast is happy to live in a political world of generalised incoherence and unreality, of which a “no deal” Brexit will be an eminently fitting conclusion.

Bombing the public

True to its taste for inflated but cliched language, the British government has promised for the autumn a publicity campaign of “shock and awe” to inform the voters about the coming consequences of Brexit, many of which would occur even if a substantial UK-EU agreement were reached before the end of the year. This will indeed be a shocking and awful task as the concrete consequences of Brexit unfold for individuals and businesses, particularly small business.  It will be a particular challenge for the governmental publicity machine to represent the enormous increase in paperwork for British exporters to the continent as a price worth paying for emancipation from the bureaucracy of Brussels.

Opinion polls already show that British public opinion is moving against Brexit. It would be surprising indeed if this development did not accelerate over the coming months. The government may well find itself in the first half of next year confronted with an increasingly unhappy electorate only too willing to blame it for its failure to achieve the unachievable Brexit promised in different avatars during the 2016 referendum. Nor will the disruption unleashed by Brexit be confined to economic issues. When it becomes a tangible reality, Brexit will also put at issue the internal stability of the UK, with Northern Ireland’s and Scotland’s position within the Union increasingly subject to question in 2021.  Any hope by the government that 2021 will see an end to European controversy is simple self-deception.

Staying European but how?

Over the coming months, two sets of political actors will be confronted with important choices on Europe, the former Remain groups and the Labour Party. Their reactions will frame the political debate on Europe as the manifestly damaging and unsatisfactory nature of Brexit becomes clearer by the day. Until now the Remain groups have been attempting to steer an unheroic path, disavowing any intention of reversing Brexit, but claiming that there is some coherent and logical alternative to Brexit which does not involve re-joining the EU. It may well be that eventually the Labour Party will drift into some similar posture, a choice which Keir Starmer and colleagues will see as apt for smoothing internal tensions on Europe within the Labour Party. In doing so, Starmer would be imitating the disastrous approach of putting party before country practiced by David Cameron in 2016, a warning example he would do well to ponder.

Many of those who formerly belonged to the Remain coalition now favour some version of British membership of the European Economic Area (EEA). They argue, with some plausibility, that this will be a way of implementing the referendum result with greatly reduced collateral economic damage. But the EEA is a path strewn with political and logical dangers. For the UK to leave the EU in the traumatic Brexit process, only to reintegrate itself into most of the EU’s regulatory framework with less say on that than before via the EEA would be eccentric at the very least. It would be the ironical and definitive realization of the otherwise absurd Eurosceptic trope of British “vassalage” to European institutions.  Many Eurosceptics from the more radical wing of the Cummings Leave coalition would sincerely prefer that the UK remain within the EU on present terms than joining the EEA. Like stopped clocks that are right twice a day, they would be entirely right in that preference. The EEA is no answer to the existential dilemmas posed by Brexit for the UK.

After some initial EU-27 hesitations, it is clear that Covid-19 will now mark a significant acceleration of the process of European integration. This will make both more pressing and more difficult the central conundrum of Brexit, which is the establishment of a sustainable relationship between a medium-sized country and its much larger neighbour, when that medium-sized country has abandoned in a fit of ill-directed pique its long-standing participation in the institutions of that larger neighbour.

A “no deal” Brexit would be inter alia a tacit recognition that this conundrum is simply too difficult to be resolved for now, given the circumstances of the 2016 referendum and the overall dysfunctionality of the British party political system. These latter barriers to a sustainable relationship with the EU are likely to remain in place for some years to come and the UK will be the systematic loser from this impasse. In the view of this writer, the only eventual escape for the UK from this crippling circle of self-harm will be for it to resume as soon as may be its place inside the EU, but this time as a full and influential member.

Now that Brexit has taken place, with the magical spell of the referendum result exorcised, it is not too early for those who want a sustainable future for the UK to start thinking about how this liberation can one day take place. A Rejoiner coalition standing against the Conservative government at the next General Election now seems a remote prospect. But in volatile times the improbable can become the inevitable with startling rapidity.

Federal Trust

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