Richard North, 27/02/2019  
 


Mrs May believes that, if we have to, we will ultimately make a success of a no-deal. And we know that because the prime minister herself told us in a statement to the Commons yesterday.

Alongside that, the Department for Exiting the European Union has published a paper on the "Implications for business and trade of a no deal exit on 29 March 2019". This summarises government contingency preparations and provides an impact assessment of a no-deal, thereby (presumably) providing the basis for Mrs May's claim.

But, in one crucial paragraph (27), of some length, the situation looks far from rosy. Although the Government has made progress in ensuring that additional controls at the UK border would not cause disruption, it says, those imposed by Member States would be disruptive.

The paper goes on to say that there have been efforts from some Member States to put in place the new infrastructure which would be required at the border to implement customs controls. But, it warns, this work is at an early stage and even when completed would lead to new burdens, and would not be the same as the fully free-flowing border in place today.

In particular, we are told, third country rules are applied by the EU, including France, would mean that no goods are allowed to leave the port until they have provided the correct paperwork and have been customs cleared (including any necessary checks at the port, for example on products of animal origin).

More significantly, Member States would hold any goods which are not correctly customs cleared. This would hold up all goods where trades are not prepared, expected to be a significant proportion in the early period after exit day.

And, on that basis, the government's worst case planning assumption is that, as a result of French checks and lack of businesses readiness, the flow of goods through the Short Channel Crossings (Dover and Eurotunnel) "could be very significantly reduced for months".

Nothing there, of course, is at all new. We've seen and reported on estimates that traffic could be cut by 88 percent, which is only to be expected if the full range of EU border controls are applied.

But, says the government, French willingness to facilitate cross-border flows means that it does not currently expect "day one" disruption to be at the most severe end of its planning assumptions.

The French, it says, have begun construction of Border Inspection Posts (BIPs) in both Calais and Coquelles, which they intend to have operational for day one after exit, although it does note that only initial ground works are underway. That does suggest that they won't be ready, especially as it is also confirmed that the recruitment of vets for these BIPs only began in November 2018.

That said, we've looked at this very carefully and my view is that we're unlikely to see gridlock on day one, or even in the weeks immediately following a no-deal Brexit. But this is for reasons which have nothing to do with the government's preparations, or the measures undertaken by EU Member States.

Nevertheless, there is good reason to believe that there will be a very substantial reduction in the flow of goods to the EU, only less so in the other direction. We believe – and have argued the case – that the main effect of a no-deal Brexit is likely to be a substantial, and possibly long-term, reduction in exports to EU Member States.

Given also that there are acknowledged problems with securing roll-overs for trade deals with non-EU countries, it is also likely that we will see reductions in export traffic to the rest of the world, with absolutely no chance that the shortfall of exports to EU Member States will be made up by trade elsewhere.

Thus, rather than the very visible effects of disruption at the borders, we see the most likely (and damaging) effect of a no-deal Brexit to be economic, expressed in terms of lower GDP, businesses going into liquidation, substantial increases in unemployment, and a significant drop in tax income.

On that basis, it is very difficult to accept that there can be any validity in Mrs May's claim that we can make a "success" of a no-deal, either in the immediate future or in the longer term. At the very least, it will trigger a prolonged economic recession. Most likely, it will cost us a substantial fall in growth and a permanent reduction in GDP.

What we are therefore seeing is a continuation of this government's tendency to underplay the harmful effects of a no-deal, distorting the Brexit debate in the process and giving rise to false expectations that the scenario is a tolerable option.

Misleading parliament and the nation, however, is not confined to the impact assessment. Mrs May's Commons statement further muddies the water, taking us deeper into the mire.

Firstly, she is perpetuating the myth that parliament is being offered a "meaningful" vote, now set for Tuesday 12 March "at the latest". It isn't a meaningful vote, in the sense that MPs have any choice in the matter. It remains as it always has been, a take-it or leave-it vote. MPs can either ratify or reject, There is nothing in the middle.

Weasel words abound in that she is giving the impression that there could be changes to the Withdrawal Agreement, or some device which makes it legally impossible to implement the backstop if certain conditions are fulfilled. But, as we all know, there will be no such changes. MPs will be offered the same diet of cold gruel, and will most likely reject it.

Mrs May's next moves, though, are interesting. If the government doesn't get its vote by 12 March, she says, it will table a motion for a vote the next day asking whether MPs support leaving the EU without a deal on 29 March. And, from there, she offers a non sequitur, asserting that the UK will only leave without a deal on 29 March "if there is explicit consent in this House for that outcome".

The point, of course, is that this "commitment" she is making as prime minister is undeliverable. It rests on the government, on 14 March, bringing forward a motion on whether parliament wants to seek a short limited extension to Article 50. If the House votes for an extension, she will seek that extension from the EU.

Clearly, there are two hurdles here. If parliament doesn't vote for an extension, then she is not obliged to pursue one. And then, if the EU does not agree the request, there will be no extension. In either case, our membership of the EU will cease automatically, whether the House has consented or not.

What it seems to me is that Mrs May has rather neatly skirted the prospect of a constitutional clash over whether parliament is entitled to require the executive to seek an Article 50 extension. By taking this on as a "commitment", she makes the Cooper-Letwin amendment redundant. She also transfers the blame for a no-deal outcome on 29 March to the EU.

At best, though, this is as Corbyn asserted, kicking the can down the road – or the whole cannery, if you prefer. But, as he also asserts, sooner or later we run out of road.

Mrs May herself only sees the prospect of a short-term extension as workable. Beyond the end of June, she says, would mean the UK taking part in the European Parliament elections. Thus, she asks: "What kind of message would that send to the more than 17 million people who voted to leave the EU nearly three years ago now?"

A short extension would almost certainly have to be a one-off, she adds. If we had not taken part in the European Parliament elections, it would be extremely difficult to extend again, so it would create a much sharper cliff edge in a few months' time.

Thus, she reiterates, an extension cannot take no deal off the table. "The only way to do that is to revoke Article 50 (sic), which I shall not do, or agree a deal".

As to creating "a much sharper cliff edge in a few months' time", this is one of the reasons why the EU seems less interested in a short extension. It may agree to one for convenience's sake, but the unanimity requirement means that any Member States, be it Malta, Slovenia or Spain, can block the option.

What we are now left with it seems, is another of those Mexican stand-offs. As long as Mrs May refuses to revoke the Article 50 notification, the only sure way to take a no-deal off the table is for MPs to agree the deal put to them on or before 12 March.

Meanwhile, Mrs May seems to be close to acquiring a new nickname: Theresa "Houdini" May could be the appropriate moniker, if she pulls off this sleight of hand.






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