Sunday 28 July 2019

The bonkers politics (never mind economics) of a no deal Brexit

Much attention has been focussed so far on the extent to which the UK will suffer economically from a no-deal Brexit, but regardless of this to me the most worrysome aspects of this scenario are the political ramifications. That is not to minimise the likely economic consequences - but it is to emphasise how bad in political terms a no-deal scenario is for the UK. I will discuss some of these likely consequences below.

Ironically, support for this no-deal outcome seems to be rising under the argument that it is getting Brexit 'over and done with'. One is tempted to make a comparison with the metaphor of the condemned person about to be executed who wishes it all to be over quickly. The trouble is that this metaphor is erroneous, since, it seems, a lot of people actually believe that it is worth suffering some short term economic pain (greater or lesser) for a what they assume will be a political settlement, at least of sorts.

But there will be no prospect of a political settlement. Indeed all we will get is an acceleration of political breakdowns. Really it is more like a descent into prolonged purgatory,

The Euro-experts, Arnand Menon and others, have pointed out that if there is a no-deal, exactly the same issue of the Irish border will remain to be settled (as well as all the trade issues), with all of the post-Brexit options still to be decided. The only substantive difference is that a political settlement with the EU will be made much more difficult by the political dislocation between the UK and the EU. The Brexiteers victory will be purely symbolic, and very pyrrhic

It should be (but apparently isn't  generally regarded as) an obvious fantasy to believe that if the EU haven't dropped, or amended the backstop and the Withdrawal Agreement, before the 'no-deal', then  they should give way any more afterwards. If we wouldn't give way why would they? Indeed, the more a British Government turns this into some sort of rhetorical war (for domestic political purposes) the more unlikely any 'blinking' on the EU's part will be.

Indeed the more the 'war' rhetoric continues, the more the UK will be hostage to whatever restrictions on goods and services entering France and other countries these nations seek to impose. Wars of any type (in this case trade and business) can't be stopped by threats unless you have overpowering advantage over your opponent (and not even always under this situation). We don't have an overpowering advantage. Anything but.

Really, the outcome of the Irish border issue hangs on the Irish Government, especially since they will have a veto over the long term agreements with the UK (done by a unanimity rule in the EU). The Irish are unlikely to be in the least phased by the talk of 'war' (read some history books on this one). Indeed the prospect that the number of people in the North favouring a united Ireland will increase will almost certainly make the Republic feel that their political strategy is making progress. They will be emboldened to keep a tough line with the UK.

Any thought that we are going to be rescued by a fast track Trade Agreement with the USA is very illusory. Apart from anything else, the Democrats appear hell-bent on stopping any UK-US trade agreement until, in effect, the Irish border issue is resolved to the satisfaction of the Irish Republic. Hence there is no prospect of a 'fast track track' trade agreement without the approval of the Democrats, so long as they control the House of Represenatives. The UK Government, would, under this scenario of putting more priority on a trade agreement with the US rather than the EU, become a political captive of the Trump Government. It would be captive sine the UK Government would need Trump not only to win the 2020 Presidential election, but assure a Republican majority in both Sente and the House.

And then there is Scotland............Faced with this political slide many more Scots are likely to plum for independence. Sure, Westminster can refuse to sanction another referendum, but we shall still live in a democracy, and a strong call for another Scottish referendum, in practice, cannot be resisted for very long. Under such circumstances the Unionist campaign to oppose independence in another indyref will be a shambles compared to the last effort in 2014.

At the end of the day a no-deal Brexit and, by extension, the whole Brexit project, is based on a failure to understand that it is not membership of the EU that limits UK sovereignty, but the very existence of the EU. Hence the logic for being part of a powerful bloc rather than a supplicant whose interests are by defintion treated as second order compared to those of its members.

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