Now down to the final two candidates, the Conservative leadership election has entertained us with fairytale visions of a bright future in Brexit Britain. Having vanquished bad Queen Theresa, good King Boris or good King Jeremy will charm the EU into offering a fabulous deal. Everyone will live happily ever after.
In the real world, the UK’s former ambassador to Brussels, Ivan Rogers, this week outlined the only four options available to the next prime minister. He could allow Britain to leave without a deal on October 31. He could make unreasonable demands on the EU as a pretext for calling a general election in which he would stand on a no-deal platform. He could seek another extension to Article 50 in the forlorn hope of discovering a new solution to the Irish border question. Or he could aim to get the existing withdrawal agreement through parliament alongside a marginally changed declaration on Britain’s future relations with the EU.
Sir Ivan’s options compress into two plausible outcomes: this autumn Britain will suffer either the rupture of a no-deal Brexit in the first two or accusations of betrayal from Leavers with the others.
Even without believing economic forecasts, we know no deal would come at a price. It would bring tariffs on trade with the EU, the administrative burden of customs declarations and infrastructure on the Northern Ireland border. At any time, Brussels could revoke temporary permissions for planes to fly, trucks to drive on the continent and finance to flow.
We do not know how bad short-term disruption might be or the consequences for community relations in Ireland. But adjusting to new trade barriers with the EU would inevitably cause pain in many exposed industries, and this would not be offset by lower trade barriers with the rest of the world.
The alternative of failing to leave on October 31 would anger large sections of society and the Conservative party. Whether a further delay or revocation of Article 50 is caused by parliament, the prime minister or the people, Britain’s relationship with Europe is likely to be a festering sore, not a healing wound. The uncertainty now clouding business decisions would persist for a long time.
So far, no candidate in the leadership contest has come close to acknowledging the reality that awaits the victor. They boast of having detailed plans for Britain after Brexit, but fail to produce details. They make outlandish promises on taxation and public spending without a strategy for the public finances. They promise technology to eliminate the need for infrastructure on the Irish border without spotting the irony that technical solutions would remove the need for the backstop.
Boris Johnson talks glibly about using Article 24 of the General Agreement on Tariffs and Trade, or World Trade Organization rules, to prevent exporters facing a tariff barrier after no deal, surely knowing that the clause can apply only between two countries that have signed a deal. Jeremy Hunt insists that German chancellor Angela Merkel and French president Emmanuel Macron would be willing to do a deal with him that they have publicly refused. The slogans are so divorced from reality that the coming collision with the facts will be painful.
In the second quarter, the British economy is likely to contract. This is just a reflection of how much stockpiling pumped up the economy before the original March 29 deadline. If the fear of a no-deal Brexit can create such swings, the reality promises to be much worse.
So we should enjoy the fantasy of the Tory leadership election campaign and the inevitable honeymoon period for the new prime minister over the summer. It will be short. Coming this autumn is a choice between betrayal and the self-inflicted wound of no deal.
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