A few weeks before the UK voted to leave the European Union, I received a text message from a senior figure in the Remain campaign. “We've got them where we want them on the economy,” he wrote. “Now we have to press the advantage.” That account of the campaign wasn't entirely wrong. It correctly identified that the other side had nothing credible to say about economic models for the UK outside the EU. The problem was that not enough voters cared.
The Remain team thought they had chased leavers off the pitch, harrying them with questions about Norwegian, Canadian, Swiss models. They cheered when Michael Gove conceded that the UK might have to leave the single market—proof, or so they thought, that the Brexiters had publicly abandoned their economic senses. Now leaving the single market is government policy. It's safe to say definitions of economic prudence have shifted somewhat in the past year.
Which brings us to the question of “no deal.” The notion that the UK might abandon negotiations under the Lisbon Treaty's Article 50 process has shuffled from beyond the fringe into the cabinet. It has entered the debate not because it has merits as an avenue out of the EU but because the Leave side won the referendum by defining Brexit in terms that preclude any of the open channels. They promised combinations of things that cannot be achieved—the advantages of the single market outside the single market; cutting immigration without economic consequences. They embraced the doctrine of cakeism (as in having it and eating it.)
There are Tory MPs who believe “no deal” is not just an available route but a desirable one. The most extreme among them relish the disruption caused by a breakdown of talks because they see chaos as an engine of “creative destruction.” There is a Bolshevik ethos among Brexit ultras that wants old structures to be levelled so that a new economic model—minimal regulation, skeleton state—can rise from the ashes.
“If the UK abandons hope of reaching one overarching deal, there will be a fire-sale of sovereignty as the Brexit clock runs down”A broader swathe of no-dealers are playing at game theory. They believe that the threat of walking away is integral to any negotiating strategy. Signal that you can't leave the table and the other side gets to dictate terms. This approach only works when the other side believes the threat is real. A haggler in a souk can decide not to buy an item if the merchant won't drop the price. But the UK is not buying souvenirs of its EU membership. It is negotiating over how to relate to its continental partners, not whether or not it should relate to them. That question doesn't really exist, at least not unless the end-state model is North Korea.
Talk of “no deal” is conceptually incoherent. In the event that Article 50 talks are abandoned, the UK would still be on course to leave the EU on 30th March 2019. On that day, a government would still want goods and people to cross land and sea frontiers. It would want its airports to stay open. There would still be EU nationals resident in the UK and Britons in the EU, wanting rights. UK-based enterprises would want their wares to be saleable on the continent but neighbouring states would be obliged by EU treaties to protect the integrity of the single market and customs union, enforcing standards and rules of origin. That means hard borders. The City would still want to be a hub for European finance. Police would still want to work with European forces and extradite European villains. The function of scores of EU agencies covering everything from aviation to handling nuclear materials and pharmaceutical safety would need replication.
(It is worth noting that these issues would not be resolved by reversion to the WTO framework that some Brexiters seem to believe offers a default template for global trade. The WTO mechanism alone could not satisfy the requirements that UK exporters would have to meet with regard to the single market. It certainly wouldn't bring anything useful to non-trade challenges. It couldn't replace the Good Friday Agreement, for example.)
“What do the hardliners really mean when they say “no deal”? In some cases, nothing at all”So if the UK abandons hope of reaching one giant overarching deal, it will instead be forced to negotiate a patchwork of ad hoc smaller deals. This would become a fire-sale of sovereignty as the clock ran down to March 2019. In other words, there is literally no such thing as “no deal.” There is a spectrum of deals, more or less comprehensive, more or less mutually beneficial, with the panic-induced, bare-bones framework that keeps the UK state functioning post-Brexit sitting at the most dismal, destructive end of the scale. This is what Michel Barnier, the Commission's chief negotiator, meant when he said “No deal would be a very bad deal.” And this is why Theresa May's formula that “no deal is better than a bad deal,” is nonsensical. (In fairness to the PM, she has stopped saying it recently.)
So what do the hardliners really mean when they say “no deal”? In some cases, nothing at all. They are either advocating a bluff that no-one on the EU side believes or demonstrating a failure to understand how EU treaties work. Most commonly the words “no deal” have become a proxy for resistance to the idea of transitional arrangements that would keep the UK closely aligned to EU institutions for a couple of years after formal exit day. And the objection to that model derives from fear that it looks reversible; that it would be “Brexit in name only,” with a notional path to Bre-entry, or some form of associate membership down the line. Eurosceptic ultras would rather burn bridges than build one and see it potentially used as a two-way street.
There is one sense in which “no deal” would be a meaningful proposition. The UK could seek to abandon the Article 50 process, retracting the notification it made earlier this year and defaulting to the status quo ante. Not currently politically likely, but technically feasible. There would, in that case, be no Brexit date so no requirement for a divorce settlement or new trading partnership to take effect after that date. No deal. But somehow I don't think that is what “no dealers” have in mind.
