Project Fear Becomes Project Reality: Whither Brexit Negotiations Now?

Project Fear Becomes Project RealityWhither Brexit Negotiations Now?

Mike Buckley looks at the most likely options for the UK as the Brexit transition phase nears an end – and sees a catastrophic ‘no deal’ break as the most likely outcome

Brexit is set to be a disaster. By January, there is likely to be food and fuel shortages, public disorder and price hikes. The Navy may be called on to protect British waters from European fishermen, while troops may be drafted on to the streets to help police retain a semblance of control. 

This is not the return of Project Fear – it is a leaked Government document which describes likely outcomes this winter in the face of a COVID-19 second peak and the end of the UK’s current trading relationship with the EU. 

Meanwhile, Brexit negotiations are, in the words of EU chief negotiator Michel Barnier, going backwards. Barnier is keen to resolve outstanding areas of disagreement on fishing rights and the level playing field, which covers commitments on state aid rules, workers’ rights, food and environmental standards. But Barnier and David Frost, his UK equivalent, operate at cross purposes.

Where Barnier seeks to minimise damage, Frost is tasked with playing to the choir of the Conservative, pro-Brexit, European Research Group (ERG) of MPs and the Leave voters who gave Boris Johnson’s party a majority last December. 

Under Johnson, the UK position has been reduced to merely restating the UK’s intention to “take back control” of sovereignty, laws and fishing waters, in wilful disregard of the fact that trade deals entail compromise.

The prioritisation of sovereignty presumably polls well with voters the Conservatives need to keep, but it is also the only possible distraction from the real-world costs of Brexit which are now increasingly hard to hide. 

---

Trade Barriers and Hard Borders

As the leaked Government document makes clear, the approaching end of the transition period brings with it consequences that the Conservatives have long tried to deny.

There will be a border in the Irish Sea between Great Britain and Northern Ireland, destabilising the peace process and increasing costs for business. The building of huge lorry parks in Kent and Hull is an admission that trade will be disrupted, deal or no deal, despite years of claims that all would carry on as before. The City of London faces barriers to trade that will cost it and the Treasury billions. Terrorists and organised criminals will benefit from Brexit as security ties are lost. The list could go on. 

Even if a Brexit deal is concluded, it would make little difference to trade barriers. Checks would still have to be conducted on every piece of freight, taking time and causing chaos.

The prioritisation of rhetoric over planning has also left the UK unable to negotiate worthwhile future trade deals. Three years have been wasted failing to agree what Britain wants from its negotiations, argues the Institute for Government – risking trade and regulatory policy being dictated by better-prepared partners. The public is increasingly aware of this, with 60% now believing that Brexit is likely to lead to higher food costs. 

The Conservatives provide mixed messages on the Government’s commitment to an EU trade deal. Some in the party apparently want to open the ‘real’ negotiations with the EU next year, confident that Leave voters will have been satisfied by exulting ‘no deal’ headlines on 1 January. If this is the plan, they may find the same response that some hard Brexiters have received on asking for last year’s Withdrawal Agreement to be reopened: it’s a little late.

The EU already has the main prize it wanted – Single Market integrity and an enforceable border backed by a legally-binding international treaty. It is unlikely to come back for round two, after a ‘no deal’ rupture – at least until there is a change of government in the UK. 

---

Deal or No Deal?

If the caricature is true and Dominic Cummings is the power behind the throne in Downing Street, then a ‘no deal’ may be the outcome.

The Financial Times reported that the Prime Minister’s chief advisor wants a “minimal, light-touch regime for state aid for British business after Brexit” – anathema to the EU. It quotes a Government insider who believes that Cummings’ view is “once you’ve left, you should just do whatever you want”. 

There is no chance of the EU concluding an agreement on these terms. “The EU is a creature of law,” argues George Peretz QC, an expert in EU law at Monckton Chambers in London. “Having a body issuing reports, saying ‘this was a bit naughty, don’t do it again’ in the place of a proper independent regulator with teeth is just not going to cut the mustard.”

Some believe that the UK will fudge the issue by concluding a deal that allows the Government room to diverge from EU norms on rights, standards and state aid – only to never make use of its new freedom. This ‘Brexit in name only’ would allow Johnson to claim that sovereignty has been returned while retaining a level of market access.

But the chance of the Conservatives’ ERG accepting such an outcome is minimal, while the EU is unlikely to want to sign a deal that would require it to monitor UK behaviour for years to come. 

It is far more likely that the UK is heading towards what has been the logical conclusion of Brexit since day one: a clean break. With that choice comes consequences the public may not be willing to pay.

Voters are increasingly sceptical about the benefits of Brexit and new trade deals, and are concerned about deals that would reduce environmental and animal welfare standards. A clear majority of all voters, including 2019 Labour-Conservative defectors, believe that COVID-19 has shown that there is a need for more international cooperation rather than less. 

If Brexit does lead to higher food prices, lower standards of food and animal welfare, fewer jobs and a slower economic recovery than our former EU partners, it could quickly become a millstone for the Government. Johnson and co. have justified Brexit on the basis that it is ‘the will of the people’, but few voted for complete severance. A BBC/ComRes poll in July 2016 found that more than 60% of Leave voters expected to stay in the Single Market, for instance.

No one voted for chaos, higher prices and shortages.

---