Brexit: How “No Deal” became the bookies’ favourite

Many commentators and political actors have only recently begun to take seriously the possibility that the “transition period” for the UK’s exit from the European Union will end on 31st December 2020 without an agreement on the future EU/UK trading relationship. There was, however, always good reason to expect such a disruptive outcome, given the gap between the underlying aspirations of the two sides in the post-Brexit negotiations.

It is illuminating to consider why it has taken so long for a “no deal” Brexit to emerge as the central prediction of analysts and experts on both sides of the English Channel. As a rule of thumb, since 2016 the European Union’s negotiators have tended to overestimate the British negotiators, while the latter have underestimated the former.

In the first phase of the prolonged sequence of Brexit talks, EU negotiators now recognise that they attributed a wholly imaginary sophistication to their British counterparts. They had assumed that the apparent floundering of David Davis in particular concealed a well-considered diplomatic strategy to the UK’s advantage, which would eventually come to light. There was much amazement in Brussels and national capitals when it was realised that no strategy underlay the floundering. The British government did not merely want to have its cake and eat it. It wanted its European partners to provide the administrative and political path for this to happen. When Theresa May eventually and tentatively attempted to provide such a path through the July 2018 Chequers agreement, the attempt destroyed her Premiership. The UK apparently willed the end of Brexit, but was for three years hopelessly confused and divided as to the means of bringing it about.

Against this frustrating background it came as a pleasant surprise to many on the continent that it was after all possible to establish a Withdrawal Agreement in the autumn of 2019. This Agreement came about because Boris Johnson proclaimed himself willing to accept a customs and regulatory border in the Irish Sea. The EU was well satisfied with this arrangement, since it had been the Union’s original proposal, designed both to safeguard its land border with the UK and the future of the Good Friday Agreement. Theresa May had denounced it as an imposition “no British Prime Minister” could ever accept, but aided by his courtiers and backers in the traditional media, Johnson brought off in late 2019 the extraordinary sleight of hand of pretending that his acceptance of the border in the Irish Sea represented a concession forced upon the EU by his own brilliant diplomacy.  His conclusion of the Withdrawal Agreement in this disingenuous fashion was a major reason why he went on to win the General Election of December 2019.

The relief of Brussels

In the immediate aftermath of the British General Election, there were some within the EU who were relieved that there was at last a stable government in London with whom they could deal – a modified version of their miscalculation of the British position during the pre-Brexit negotiations. If, it was argued in Brussels, Johnson had once been able to disguise his surrender to the negotiating demands of the EU on Ireland, perhaps he could do so again in the broader post-Brexit negotiations.  With an unshakable majority in Parliament to support him, Johnson might be able to emancipate himself from the dominance of the European Research Group (ERG) in the Conservative Party. This would create a more rational and constructive atmosphere for the post-Brexit talks, particularly in the administratively pressing matter of extending the transition period beyond the end of 2020.

All the above hopes were remorselessly demolished in the early months of 2020. The British government made clear that it would not in any circumstances be seeking an extension to the transition period; Johnson in particular seemed to be resiling from the UK’s commitments on Ireland in the Withdrawal Agreement; and the British negotiators were woefully tardy in presenting proposals of their own, preferring simply to reject the EU’s proposals as being insufficiently respectful of British “sovereignty.” Gradually and probably unwillingly, the EU came in the spring of 2020 to the realisation that far from being a stabilising element in the post-Brexit negotiations, Boris Johnson’s large Parliamentary majority made a “no deal” Brexit almost inevitable. Even before the impact of the Coronavirus made itself fully felt, the EU negotiators began to harbour private doubts about the possibility of concluding any worthwhile agreement with the British government in 2020.

On the other side of the Channel, the misconception of Johnsonian moderation encouraged by a large Parliamentary majority was one initially espoused by some British commentators. Johnson, these optimists suggested, was essentially a pragmatist who would be looking to put Brexit behind him as rapidly as possible, with a view to pursuing a broader agenda of social and economic “levelling up” within the UK.  The manifest absence in Johnson’s political career of any guiding political or ethical principles was seen in this context as a positive factor. A Prime Minister without political principles of any kind should find it easy to negotiate a trading arrangement with the EU that flew in the face of any previously enunciated principles of his Party.

ERG rules

All this was entirely to misread the present-day Conservative Party and Johnson’s position within it. The political cleansing of the Parliamentary Conservative Party that Johnson undertook in the summer and autumn of 2019 was simply the final culmination of a decades-long process begun under John Major, by which all traces of pro-European sentiment were ruthlessly expunged from the Party. The individual prominence of Ken Clarke, Michael Heseltine and Dominic Grieve sometimes obscured from superficial observers their political weakness and isolation within their own Party. They themselves claimed on occasion, as a justification for their continuing party membership, that they represented some significant hidden body of opinion within it. Events since 2016 within the Conservative Party have shown this to be self-serving delusion. Brexit is the central and only unifying goal of today’s Conservative Party. Any other rhetorical tropes about One Nation Conservatism that Johnson or his colleagues ever employ fade into insignificance beside that overarching obsession.  It is a fundamental category mistake to think that Johnson could ever be able or even wish to emancipate himself from the ERG. The ERG is now the Conservative Party and the Conservative Party is the ERG.

After the 2019 General Election, Johnson chose a Cabinet of Eurosceptic mediocrities, but a Cabinet that largely reflected the Conservative Parliamentary Party. Many of these Ministers were profoundly uneasy about the first transition period until the end of 2020. Corporately they will find it impossible to swallow any further extension of this period. From their point of view, it is not difficult to see why. There would be a financial cost associated with an extension; it would prolong the period during which the UK was subject to the reach of EU legislation; and it would complicate the negotiation of trading agreements between the UK and third parties such as the United States. It is therefore more than doubtful whether a now politically weakened Johnson would be able to mobilise support within his Party for any extension.

Some in the Conservative Parliamentary Party recognise that without an extension a “no deal” Brexit is inevitable. They will welcome or regret that according to their underlying political preferences. Many will be relieved that if there is “no deal” they will not need to endorse an agreement which proves by its inevitable unattractiveness that Brexit was a mistake and that the UK is stronger within the EU than outside. Others will cling fast to the delusion that it will be possible to browbeat the EU into concluding a favourable agreement in the autumn as the end of the transition approaches. Few of them in any case will be prepared to risk the wrath of Boris Johnson’s Pretorian Guard by advocating an extension, one that will inevitably (and not implausibly) be presented as an attempt to delay the full implementation of Brexit. It will be much more politically convenient to inveigh against the supposed intransigence of the European Union in culpably failing to give the British government all it wanted in the post-Brexit negotiations.

Billet amer

The exchange of letters between Michel Barnier and David Frost in late May was for some commentators the moment of recognition that a “no deal” Brexit may well be the outcome of this year’s negotiations. Weary resignation was the leitmotif of Barnier’s letter and a patronising self-righteousness that of Frost’s. Months of negotiation do not seem at all to have dented the conviction of the British negotiators that they understand the EU’s interests better than does the EU itself; and that the EU is acting unreasonably in not offering to the UK at the very least all the aggregated benefits offered to different third countries in past trade agreements. These arguments have never commended themselves to the EU negotiators. Their highly public repetition by Frost caused much avoidable irritation and offence.

The conclusion of the post-Brexit negotiations by 31st December 2020 would always have been an extremely demanding target. The Coronavirus pandemic has made this target impossible, and all rationality points towards an extension of the transition period. Unfortunately, rationality on European policy is in distinctly short supply within the Party sustaining the present British government. There is therefore no chance of an extension to the transition’s being sought before the end of June. It is perhaps conceivable that Boris Johnson’s government will panic in the autumn and then seek an extension after all. But it is by no means certain that in those circumstances the EU would be willing to concede. The European Council might well have concluded by then that it is time to “move on” from the psychodrama of Brexit.

There are undoubtedly members of the Johnsonian court consciously seeking a “no deal” Brexit as a purifying and revolutionary episode. They will probably be telling him that the economic catastrophe of the Coronavirus will dwarf and conceal the only slightly lesser catastrophe of a “no deal” Brexit.  It would be a fitting, if tragic end to the first phase of the Brexit saga if those who persuaded the British electorate in 2016 that Turkey was about to join the EU, that Brexit would liberate £350m per week for the NHS and that the UK had no control of its borders within the EU now sought to persuade the British electorate that the disruption caused by a “no deal” Brexit was in fact simply the consequence of the Coronavirus, with a side order of intransigence from the European Commission. The Brexit project was one conceived in lies and cynicism. Its adolescence in 2021 will almost certainly display the same toxic components – in compounded form.

This article was originally published by the Federal Trust.

About the GPI

The Global Policy Institute is a research institute on international affairs. It is based in the City of London, and draws on both a rich pool of international thinkers, academics as well as policy and business professionals. The Institute gives non-partisan guidance to policymakers and decision takers in business, government, and NGOs.

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