‘No-deal’ remains possible, as Johnson gambles with our country

Photo by Jannes Van den wouwer on Unsplash

Much has happened in the past two months, though the overall picture remains the same: the deal/no-deal question hangs in the balance – the moment of truth will come sometime in the Autumn.

Although any deal in prospect will be a hard and very damaging, it will be significantly better than a catastrophic no-deal (West England Bylines will shortly publish Ian Bartle’s analysis of these alternatives).

“An agreement between the UK and EU seems unlikely. I simply do not understand why we are wasting valuable time,” the EU’s chief negotiator Michel Barnier said on 21 August. Is this another step in the slow evaporation of hope that has continued over the past two months? And even if there is a deal, will it be much better than no-deal?

Since June 2020 and the UK Government’s refusal to extend the transition period, there have been few outward signs of progress towards a deal: the UK government’s chief negotiator David Frost has shown no sign of compromise on the key issues. In a tweet on 13 August he repeated the point that: ‘We are not looking for a special or unique agreement. We want a deal with, at its core, an FTA like those the EU has agreed with other friendly countries, like Canada’.

In this, Frost fails to recognise that the UK is economically much more integrated with the EU than is Canada, and geographically much closer. He fails to accept that the EU can therefore legitimately ask more of the UK than it asked of Canada.

But Frost also fails to say that the UK actually wants more than is in the Canada deal.

Despite this, there has been increasing confidence among many commentators – that is, specialist journalists, academics, and trade specialists – about the chances of a deal. They have suggested there has been some movement behind the scenes;  in the Financial Times, Peter Foster wrote on 31 July that: ‘There remains a widespread presumption that there will be an EU-UK trade deal, both in the financial markets and wider commentariat’, while Charles Grant of the Centre for European Reform said on 29 July that: ‘There has been more progress than one might suppose from the public comments of Barnier and Frost’ and is optimistic about the prospects of a deal. On 14 August Professor Anand Menon described the continuing difficulties, but said: ‘It would be unwise to bet against a deal being reached, for the simple reason that both sides want one’.

Some journalists tell a similar story, Andrew Grice in the Independent writing on 29 July that: ‘The negotiations will go down to the wire, because they always do, but there’ll almost certainly be a deal’, while Matthew Parris in the Times on 24 July argued that Britain is now heading for ‘satellite status’ of the EU – that is, a deal the reality of which will allow reasonable trading arrangements, but will be a ‘damage limitation exercise’; Jennifer Rankin, the Guardian’s Brussels correspondent, meanwhile tweeted on 18 August that ‘I think a deal more likely than not’, though there is a ‘non negligible chance of no deal’.

However, there have also been authoritative voices who believe no deal is likely.

In a talk to Bath for Europe on 12 August, Professor Michael Dougan said that even if there is a zero tariff/quota deal – which he considers unlikely – it will not be much better than ‘no-deal’.

A zero tariff/quota regime is just a small aspect European integration – many of the benefits of EU integration are drawn from the elimination of non-tariff barriers, and from the wide-ranging programmes and regulatory regimes of the single market, and they are likely to be lost even with a deal; Will Hutton has argued that any such limited deal will be ‘in effect, A no deal Brexit’ (Observer, 26 July).

Pessimism has also been rife among MPs who are committed Europeans. On 30 June Ben Bradshaw, the Labour MP for Exeter, said: ‘With tonight’s deadline for a Brexit transition passing it’s clear we’re heading for no-deal & that this is Cummings/Johnson’s deliberate strategy’; in a talk to Bath for Europe on 16 June Wera Hobhouse – the MP for Bath – also thought no-deal was likely.

My assessment – based on the assessments of a range of commentators, as well as my own – is that, as shown in the table below, the deal/no-deal question still hangs in the balance.

Graphic: Ian Bartle, from his own research

There remains a significant chance of no-deal, but we should be sceptical of threats by the UK Government to pull out if they don’t get their way; there was, for example, a threat in February to withdraw from the talks if there was no significant progress by June, and similar threats in June if there was no progress by the end of July.

It is now the end of August and the UK Government has not pulled out.

In February there were also threats from the Government to renege on the Irish Sea border element of the Withdrawal Agreement: the Government quietly dropped these threats, and proceeded with work on implementing the special arrangements for Northern Ireland – though some hardliners are now calling on the Government to pull out of the Withdrawal Agreement.

It has been widely recognised for several months that decision-time will be in the Autumn – in particular, the October European Council – though it could well go beyond that: political movement at the top will be required to break the deadlock, and this will not happen until the Autumn.

Short of a major capitulation by the EU – which is highly unlikely – Johnson and his team will have to make a big decision, and it will be based on their assessment of domestic politics. The pressures on them will be huge: are they prepared to accept the political and economic consequences of no-deal? Do they think they can get away with it – perhaps by seeking to conceal the consequences under the effects of the Covid-19 pandemic? Or will they be able to dress up a deal as a victory when in fact they will have compromised and possibly even capitulated?

It remains the case, however, that any deal will be a hard Brexit – but still not as bad as a catastrophic no-deal.

Ian Bartle is a political scientist who has held research positions at the Universities of Bath, Exeter, Sheffield and Birmingham. He is an active member of Bath for Europe