Boris Johnson will have to disappoint someone in 2020 as the UK finally leaves the EU

Finally, after three and a half years, the UK has reached “the end of the beginning” with Brexit, in Winston Churchill’s famous phrase.

Since the referendum, its leaders have consistently refused to confront the real choices that have to be made over what type of Brexit it wants to have:

  • In June 2016, then premier David Cameron walked away from the issue by resigning immediately after the referendum
  • His successor, Theresa May, followed this by setting out her ’red lines’, as shown in the chart. But she never said what she did want, effectively leaving No Deal as the default option
  • On the Labour side, Jeremy Corbyn indulged in the same game-playing, even refusing to say which way he would vote in a new referendum

As a result, the myth grew up that there was a wonderful option called ‘WTO terms’, which would allow the UK to do exactly as it liked on standards, regulations, freedom of movement etc. Yet it would still have complete access to the EU27 market without any need for quotas or Customs barriers.

Unfortunately for all those who have indulged in such wishful thinking, 2020 is likely to provide an abrupt and painful wake-up call.  Once the UK has left the EU in January, Johnson will have to make major choices, and on a very tight timescale.

The government’s key mistake all along was to table its Article 50 notification to leave without having first decided what it wanted from the new relationship with the EU27. And by dismissing the role of “experts” and key Brussels negotiators such as Sir Ivan Rogers, it also never properly understood what might be possible from an EU27 perspective.

Now the need for choices is going to become apparent, as the Transition Agreement only runs to December 2020, and any request for an extension has to be agreed by June.  Johnson has said he will not ask for an extension, and so this narrows the choices:

  • France has said the UK can leave with a ”unique” trade deal encompassing most of the current arrangements, if the UK agrees to maintain today’s standards and regulations into the future. In effect, this would be a Norway-type deal, where the UK becomes a rule-taker, without any say in how the rules are made
  • The alternative is to leave with No Deal, as anyone with experience of trade deals knows that it is simply impossible to square all the necessary circles involved in reaching a new deal in less than 5 – 7 years. The reason is simply that trade deals create winners and losers, and the losers always complain, very loudly

One likely example of a deal-breaker is fisheries policy.

Fishing accounts for just 0.1% of the UK economy, and employs only 24k people out of a total workforce of 33m. And contrary to popular belief, not only have foreign boats been fishing in UK waters for centuries, but 70% of the fish eaten in the UK is imported (cod etc) – with 80% of fish caught by UK fishermen  exported (herring, shellfish etc).

But it was core to the Leave campaign, and Johnson is likely to find it hard to ignore – even if that means fishermen end up facing quotas, tariffs, Customs barriers and a collapse of conservation policies.

Johnson is happy to break promises, as he did over N Ireland when agreeing to the EU27’s terms for the Withdrawal Agreement. But it would be rather soon after the election to break his promise over fishing or, indeed, his promise not to extend the Transition period.

As a result, Theresa May’s legacy will finally be fulfilled, as No Deal remains the default option.  And at that point, the UK will learn very painfully that you really cannot “have your cake and eat it”, despite Johnson’s claims to the contrary.

Wishful thinking dominates Brexit debate as the UK heads towards No Deal on 31 October

One of the best things I learned at school was the simple mnemonic:

“To ASSUME can make an ASS of U and ME”

Unfortunately, most of those involved in the UK’s Brexit debate have failed to remember it.  As a result, it seems likely that the UK will end up leaving the European Union on 31 October with No Deal.

The problem comes down to the set of false assumptions summarised in the slide above:

  • Don’t worry, history shows the UK won both the Battle of Waterloo and World War 2 by small margins – the Prussians arrived just in time to help win the Battle of Waterloo in 1815, and Hitler called off the Battle of Britain just before the RAF ran out of aircraft and pilots in 1940
  • The terms of the Withdrawal Agreement were only a bluff. German auto manufacturers will never allow their UK sales to be jeopardised.  And countries such as France, Italy and Spain will soon reverse course once they realise they might lose their UK tourist income
  • Everybody knows that Parliament would never allow a No Deal Brexit to take place, and so there’s no need to actually make the case for why it might be a disaster. After all, the Speaker said last week that he would probably allow an emergency debate if it ever looked likely
  • Company chiefs in favour of Leave have been prominent in the Brexit debate, but bosses who favour Remain would risk upsetting Leave customers if they did the same.  And anyway, everybody knows that in the end, someone will appear with a magic wand to make everything end happily

These are all arguments that have been heard everyday for the past 3 years.  The problem is that they are simply wishful thinking, and yet are never challenged.

The success of the Brexit Party in the European elections makes it almost certain that the next Tory leader will be a hard-line Brexiter.  As the chart shows from YouGov polling, most Conservative Party members (who will make the final decision) actually voted for the Brexit Party rather than the Conservatives in the election.

Similarly, it seems highly likely that No Deal will be the base case for most Tory leadership hopefuls.  And the position of Boris Johnson as front-runner is very clear, as the Leave.UK poster confirms.

Given that the leadership election is already underway, we also know how events will likely play out:

  • The new Tory leader will be elected in July, ahead of everyone’s summer holidays in August
  • Brussels will quickly refuse their demand to renegotiate the Withdrawal Agreement
  • The new premier will dismiss this as bluff during September and at the Party Conference
  • The UK will then leave the EU without a deal on 31 October

After that, either the new EU Commission will make a hurried phone call, saying it is all a terrible mistake.  Or the UK will find that 31 October was just “the end of the beginning”, and will instead start the lengthy process of negotiating a free trade agreement – whilst the EU implements their Preparations for a No Deal Brexit..

THE TIMETABLE FOR AVOIDING NO DEAL IS VERY SHORT
The key issue, as the independent Institute for Government (IfG) has noted, is that:

“A new prime minister intent on No Deal Brexit can’t be stopped by MPs.”

It is also clear from recent statements from Labour leader, Jeremy Corbyn, that he continues to regard a second referendum as very much a last resort, as The Guardian reported last week:

“Speaking in Dublin, the Labour leader said the only way to break the deadlock would be a general election or a second referendum after negotiating a softer Brexit deal with Brussels.”

Corbyn knows very well that a new Tory premier is most unlikely to seek a “softer Brexit deal”, and he also knows that it would be impossible to negotiate a new deal before 31 October.  It would be almost impossible even to organise a General Election before 31 October, as the IfG have also explained:

  • The election would have to be held by 24 October, as  the UK will otherwise leave by default on 31 October under the terms of the extension agreed under last June’s Withdrawal Act
  • The Fixed Term Parliament Act (FTPA) means the government would have to lose a second vote of confidence by 16 September to allow 25 days for campaigning, and 2 days for “wash-up” (deciding which bills can become law before dissolution)
  • The FTPA also mandates 2 separate votes of confidence, with a 14 day gap – so the 1st vote has to be held by 2 September ie the day that Parliament probably returns from its summer holidays

This tight timetable also raises an unanswered question as to when the vote of confidence would actually be tabled, if parliament is in recess?

Wishful thinking and wrong assumptions have dominated the Brexit debate. So there is little reason to assume anything will now stop the UK leaving on 31 October, in time for Halloween celebrations.

Afterwards, of course, everyone will be free to blame everyone else for “not making it clear what would happen”.  But that is always the result when wishful thinking is involved.