The 11th hour, much less the 1,439th minute, is not the right time to have negotiations about points of detail. We are now six weeks past the point where both sides said a deal should be concluded. And yet talks continue, as I speak Michel Barnier is in London, and so far neither side wants to be seen to be the one to pull the plug.
In any sane world we would be about to begin a two year extension period, during which rational negotiations could be completed, preparations made and, hopefully these things could be done in a post-pandemic world. There is a government which is not going to behave sanely if it is has any alternatives.
Lies and Damned Lies
Again and again we have the same platitudes from the Brexit side. Firstly, that the Europeans need a deal more than the UK does, and during the German presidency of the EU Angela Merkel would be pressed by German exporters to compromise. Secondly, that in EU negotiations it is normal for everything to be decided at the last minute and unless there is time pressure the Europeans will not come to their senses. Thirdly, that 95% of the measures in contention have already been agreed. Fourthly that British resilience is such that we can cope with the pandemic and therefore can cope with anything, so if our bluff is called and we finish up with ‘an Australian solution’ i.e. no deal, that would be, in the PM’s words, ‘a good outcome’.
I think this is the same delusional thinking that told us in June 2016 that we would have “the easiest deal in history“.
Firstly, no other European country, even Ireland, will see the same impact on its economy as the UK. The latest OBR (Office for Budget Responsibility) projections, commissioned by the government, indicate a long-term loss to GDP of about 4% even if there is a deal, and about 6% if there is none. This is considerably greater than the impact of Covid, which is obviously massive in the short term but is expected to diminish. European governments know this, even if the UK government pretends not to. And they are united in pushing the integrity of the single market ahead of trade with the UK.
And yes, the EU has form in agreeing internal deals at the last minute. This is not an internal deal, as the UK is now a third country. What is more, a deal reached in haste is not a good one. The Withdrawal Agreement was signed about a year ago in a very great hurry, and was ratified by the prime minister and approved unanimously by Conservative MPs who actually voted not to give themselves time to read it. Now many are repenting at leisure, and this government is blithely telling us it is so unsatisfactory that it has no choice but to break it in defiance of international law.
The deal is indeed 95% agreed. That appears to have been the figure for several months and of course it reflects that the remaining 5% is the most difficult part. A “Final Agreement” has been “about a week away” for a very long time. Perhaps it will never come closer.
And then of course there is this dreadful lie about “resilience”. What these people are actually saying is that it is okay to take advantage of the disruption caused by the pandemic because it may mask that caused by Brexit. This is as mischievous as it is untrue. It is like saying to a man who has had one arm cut off that he seems to be coping fine and therefore it doesn’t matter if he gratuitously has the other one cut off as well. Industry is suffering and the pandemic has made it even more difficult to prepare for a no-deal Brexit than it would be otherwise. The constant refrain from government that it should do so, when even now it does not know what is supposed to be preparing for, is deeply hypocritical.
The Stumbling Blocks
The three principal stumbling blocks are the same as always, namely
- the level playing field, particularly in regard to state aid, and
The state aid issue is actually something of a straw man, In regard to governance, to some extent this is a self-inflicted problem for the UK government: the Internal Market Bill has turned it into an untrustworthy partner, but presumably the offending clause would not be necessary if an appropriate deal could be achieved.
So really this is all about fishing. The value of UK fishing is perhaps 1/80th of that of the automotive industry and 1/200th that of the financial sector. It is nonetheless understandable that to those who have not looked at the facts it has it has talismanic significance. Yet negotiations are bound to fail if the UK government is unwilling to compromise. The French in particular have much to lose if they do not have access to UK waters, whereas the UK fishing industry has little or nothing to gain by not letting them in. Indeed the penny is beginning to drop and there are increasing voices within UK fishing which, like manufacturing and agriculture, condemn the prospect of a no-deal Brexit. Frankly it is no good catching fish if you lose your largest market, and 60% of fish caught by the UK fleet are exported to the EU. The British are not enthusiastic eaters of fish, and such fish as they do eat, eg cod, are caught abroad. In a no-deal scenario tariff barriers would be potentially fatal. And, as Richard Corbett points out, even if the EU conceded in full it would not solve the UK’s problems, as both sides are bound by international conventions including the UN Convention on the Law of the Sea. So the constant talk about fishing is based on yet another lie.
Deal or no deal
We do not know whether there will be a deal, nor do we know much about what it would look like.
What if there is one?
There will be impossibly little time to ratify it, or indeed to read what may turn out to be a 1000 page document. The opposition parties will have a painful dilemma, and even before they know the details Labour are reportedly sharply divided. On the one hand they would prefer to see a deal passed than no deal, but on the other they are very clear that any deal which can be achieved now would be nugatory, and nothing like as good as what is being left behind. Understandably they do not want to be seen to abet the government in getting it through Allegedly Keir Starmer is inclined to vote pro, and many others would wish to abstain. At the same time there are pro-EU groups such as Another Europe Is Possible who are calling upon Labour to vote against, in the expectation that the deal will go through anyway despite opposition from the ERG. This seems an odd position to take: do Labour MPs really want to be seen as allies of the ERG? It is not an easy choice for Labour
However, devoutly though we may wish for a deal of any kind, however insipid, it will not help in relation to non-tariff barriers. We will still get queues of 7,000 lorries at Dover, there will still be a shortfall of 50,000 customs officers and there will still need to be 200 million extra pieces of paper completed every year by exporters. The haulage industry faces a very painful time indeed. And even if the deal means that some companies remain viable who would otherwise not do so, it does nothing for the services sector, which is 80% of the UK economy, and which has known for at least the past three years that such essential rights as passporting will cease.
And if there is no deal?
The fact that EU countries have been making preparations and the UK has not will be unmasked on day one. WTO tariffs will have to be applied to British exports to the EU.. Examples are 10% on cars and 30% on lamb. The UK has said that it will waive tariffs, but in the absence of a deal it will be obliged to do this for all, not just EU, imports. So a perfect storm of increased costs and increased bureaucracy for exporters, undercutting of domestic producers by cheap imports, and reduced revenue for government. All the while this Government will blame betrayal by the Remainers and the intransigence of the EU (who have only ever done precisely what they said they would do from the start).
And as for fishing, yes, the UK will proudly claim control of its 200 nautical mile limits (mainly be it noted relating to Scotland rather than England or Wales – see map) but good luck with trying to enforce them or to gain redress against offenders in any international forum. And who on earth is going to buy all these extra fish? They will finish up dying of old age in the sea or rotting in the harbours or in the backs of lorries.
As an impoverished Britain flounces away from the greatest missed opportunity in history, the words of Douglas Adams will ring in its ears: “So Long, and thanks for all the fish”
Ed: This is a shortened version of an article originally published on the Oxford For Europe Website
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