Richard North, 19/12/2018  
 


If anything makes sense of Brexit at the moment, it is the sudden focus on preparations for a "no deal" exit. Whether intended or not – and I rather think it was intended – this has had the effect of raising its profile on the media agenda, to the extent that it is being talked about as never before.

Not least, with the headline figure of £2 billion being allocated to the preparations, the public is being presented with the spectre of much-needed domestic policies being abandoned to make the funding available.

Something, though, must give if we are to break out of the stalemate that's been gripping the Brexit process. For a long time, I've been saying that it is not until people have a better understanding of the dangers will they realise that a "no deal" Brexit is to be avoided at all costs. And only then will they start looking at Mrs May's deal in a new light.

But, as long as they believe a "no deal" scenario to be a tenable option, there will never be the pressure needed to ensure it won't happen. If, on the other hand, people begin to realise that "no deal" comes with an unacceptable cost, then that could be enough to tilt sentiment in favour of doing a deal.

However, the idea that the UK government can make any meaningful preparations for a "no deal" Brexit, with the expenditure of a mere £2 billion is absurd. Apart from anything else, there are 320 workstreams across Whitehall on "no-deal" with each workstream likely containing numerous plans. In government terms, the amounts are trivial.

That amount of money, therefore, is likely to be only a down-payment – with no top limit. And government expenditure will doubtless be only a fraction of the amount borne by businesses and the population at large, in lost opportunities and additional costs.

With 100 days left before Brexit day, businesses are having to commit huge sums to executing contingency plans. These will move into high gear as HM Revenue & Customs email 80,000 businesses this week to explain the impact, providing 100 pages of updated advice online on possible changes at borders.

But the crucial point that seems to be missing from current discourse is that much of what is needed to prepare lies not only in the UK but with the governments of the Member States and the EU institutions. And it is today that we are to hear from the Commission big time about its latest plans.

Further, it cannot be a coincidence that we see a push from both sides of the Channel on precisely the same issue, augmented by the Irish government, which is also preparing its own report on "no deal" preparations. By the end of the week, the consequences of a "no deal" Brexit will have been well and truly aired – just as we break for Christmas.

On the domestic front, the media highlight is 3,500 troops earmarked for Brexit duties, so it doesn't take much imagination to work out Mrs May's game plan – if that's what it is. Troops in the streets sends a special message and nothing is more calculated to raise public concerns.

If this stratagem works, and Mrs May manages to stoke up enough public concern at the prospect of a no-deal, and that concern gets communicated to MPs during the break, then there is a better chance of getting parliament to accept her plan.

But, if that's the theory, there is an awful lot resting on it – and much that can go wrong. The "project fear" meme is so embedded in the psyche of the "ultras" that even (or especially) copper-bottomed information on the devastating impact of a "no deal" Brexit is simply not being believed.

This is not helped by issue-illiterate pieces in the legacy media, such as this from the likes of Shanker "Snake Oil" Singham which rehearses the same tired canard that European Union "has more to lose from a 'no deal' Brexit than a well-prepared UK".

Typical of the fare that we get from this source is the dismissal of food vanishing from supermarket shelves as "nonsense". It is ludicrous, he writes, "to suggest food will vanish from supermarket shelves following a 'no deal'".

But, examining the rhetoric – or its absence – Singham offers no support whatsoever for his claim. Yet, for all that, it is not a given that there will be food shortages following a "no deal" exit.

There are several possible scenarios, but the most likely is a logjam at the ferry ports, specifically the Channel ports at the European end. The way this works is that UK goods exported to EU Member State destinations will leave this country with relatively little delay (assuming the paperwork systems work).

In this scenario, the hang-up comes when goods are presented to the authorities prior to entering into circulation in the Member States. Statutory checks will so delay the trucks that the build-up at the ports will prevent the ferries being offloaded. And, if they can't be offloaded, they can't return to be loaded with new goods, and the whole system seizes up.

Already on this blog, we have suggested mitigation: by limiting the entry of trucks to those which are guaranteed clearance, using a permit system, blockages at the ports could be avoided. But, of course, there is a cost – there always is. The penalty is the loss of exports and the concomitant economic damage.

And this is the thing with these purveyors of false tidings. They never do detail – it is always high-flown rhetoric and generalisations, combined with denigration and refusal to engage.

This is fed by the likes of the Telegraph offering fantasy solutions such as the latest from ex-Brexit secretary Dominic Raab. And here, the other dynamic comes into play – the willful ignorance of people who should know better.

Raab argues that we could manage the risk of EU border checks adding costs to UK businesses if the UK adopts a "continuity" approach, recognising EU regulatory standards on day one of Brexit, and taking an intelligence-led approach to enforcement rather than checking every truck from Europe.

Likewise, he says, on exit, UK goods will comply with EU standards, which means that checks would take two minutes per lorry, not the ten minutes as Whitehall planners (inexplicably) assume. And, if President Macron sought to choke the flow of UK goods entering via Calais, ports like Zeebrugge and Rotterdam would hoover up the business.

Ministers, says Raab, need to work with operators and port authorities, so we have capacity to divert supply routes via Belgium and the Netherlands as swiftly as possible.

I have lost track of the number of times I've explained that regulatory conformity is on the starter for ten, and no less than Michel Barnier has expanded on this by referring to the regulatory "ecosystem", conformity with which is required before there can be frictionless trade.

There is not the slightest chance that the UK is going to experience the same free movement of goods (or services) that we enjoyed while we were members of the EU and participated in the Single Market. Yet Raab, contrary to all explanations and warnings, is assuming that we can.

But the saddest of all of his suggestions is that we should support businesses most at risk from a departure on WTO terms, using the £39 billion the UK would have paid the EU to cut business taxes to boost them as they transition, and offset their costs.

Then he thinks that we "would inevitably return to negotiations with the EU", but as an independent nation, having demonstrated there is no need for extra infrastructure at the border in Northern Ireland, and no need for the backstop. The path, he says, would be cleared to negotiate a best-in-class free trade agreement, and arrangements for security and other areas of close cooperation.

The worst that might happen, he avers, is the risk of "up to six months of significant - but manageable – disruption", whence – doubtless – the sunlit uplands beckon, and we enter a golden era of free trade with a chastened European Union, only too willing to give us what we demand.

The trouble is that there is no rational way of countering this stupidity, as Raab – like many of his "ultra" fellow travellers – is not acting on a rational level. This is unicorn farming at its highest level, an article of faith that requires none of the inconvenient things like reality to make it happen.

In times gone past, one would like to believe that newspapers would not print such fantasy offers in lieu of serious policy suggestions, but I'm not so sure that is the case. But, if policy is to be driven by such fantasies we are doomed to the chaos, of which we are currently being given a taste.






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