The myth of No Deal

It suits the government to keep talking about the possibility of No Deal for as long as the first stage negotiations continue, for three reasons. First, there is of course the remote possibility that the other side will believe it and make some concessions to avoid it. Second, as concessions are made on the UK side, it becomes a palliative to Brexiteers: maybe the Lion will roar in the end. Third, when the deal is finally done, the collective response might be relief that No Deal has been avoided rather than indignation at the terms.

But how can I be confident that No Deal will not actually happen? First, there has as yet been nothing done to prepare for that consequence, as Chris Cook outlines. Now you could rightly respond that this government is not known for its rational planning so this means little. But the lack of planning means that No Deal will bring UK chaos: not just firms leaving or going bust but highly visual dislocations like lorries clogging up ports and motorways. It would look like total economic incompetence, like Black Wednesday on steroids. It might mean the Conservatives lose not one but two or three general elections.

That is not the legacy that May wants. The second reason No Deal will not happen is that she wants to be remembered, despite everything else, as the Prime Minister that got the deal done without destroying her party. The only way I can see of that not happening, given the pro-Brexit nature of Conservative Party members, is if she is unseated by Brexiteers. 

The chaos argument still applies. So those who try to remove May before a deal is done will be putting the terms of Brexit above party loyalty: not something you normally associate with Conservatives, but as Raphael Behr argues that is just what many Brexiteers might do. (An exception is surely Boris Johnson, who sees Brexit as his route to power and would prefer the safer route of the inevitable leadership election after the deal is done.) But they would need good cause, and the details of citizens rights, the divorce bill or even the terms of transition seem unlikely to be enough. What could trigger a revolt is if the EU presses the border issue at the first stage as I outlined here, forcing May to agree to stay in the customs union permanently or more likely abandon the DUP. Even then, there may be enough Remain MPs to block the challenge or enough members may choose to compromise rather than risk electoral oblivion.      

Yet although No Deal is very unlikely to happen, it will remain a myth long after the deal is done. It will become the excuse used by Brexiteers for why the post-EU period turns out to be no better and perhaps worse than its predecessor. If only we had ‘true Brexit’, they will say, things would have been different. Ironically a deal is useful to Brexiteers in that it gives them a story for why the sunlit uplands that they described during the referendum campaign did not come to pass.

However we should still be concerned about No Deal rhetoric for the following reason. If you were the head of a firm having to decide to make an investment which would lose money if there was No Deal, would you have the confidence based on the analysis above to go ahead with that investment right now? I think you would be far more likely to postpone until you saw what happened. In addition there are all the EU nationals in the UK who continue to face a horrible uncertainty about their status under No Deal, as well as the prospective EU immigrants who will not come for that reason. Talk of No Deal, even if it is cheap talk, has real economic and social costs.