Boris Johnson has said that Britain will “prosper mightily” in the event that no trade deal is agreed with the EU before the end of the year. That hypothesis is coming dangerously close to being tested.
Brexit talks continue in London this weekend, with signals that a free trade deal is achievable by the end of the year, but far from certain. The areas where differences remain are mainly fishing, state subsidies, and the mechanism for enforcing whatever is agreed. Those are not minor issues.
Technically, it is easy enough to devise bridges between the two sides. The problem is lack of clarity about the real purpose of Brexit on the UK side, and the lack of trust that British vagueness engenders in Brussels. Boris Johnson is holding out for maximum sovereignty – zero commitment to EU norms – and insisting that such regulatory freedom poses no commercial or strategic challenge.
Plainly it does. The EU does not give non-member states generous access to the single market so they can undercut European competitors. And Mr Johnson’s promises that the future relationship can evolve harmoniously are belied by the fact that he has already unilaterally repudiated aspects of last year’s withdrawal agreement. The UK government has proved that its word is no bond, so Brussels demands robust sanction for future treaty breaches.
To secure any deal, the prime minister will have to compromise a little on sovereignty. That is how trade agreements work between medium-sized countries and continental blocs. That asymmetry of power does not change if a deal cannot be reached before 31 December. Negotiations would resume in 2021, but with more bitterness on both sides, exacerbated by Mr Johnson’s inevitable recourse to nationalistic rhetoric, blaming the failure of talks and their painful consequences on perfidious foreigners.
In that scenario, Mr Johnson’s forecast of Britain prospering mightily will look complacent at best. The prime minister likes to deal in distant horizons, from which he imagines future generations looking back, grateful for Brexit. But even if that destination were theoretically available, it is not happening soon.
In forecasts to accompany this week’s spending review, the Office for Budget Responsibility envisages a no-deal Brexit dragging growth down by 2% next year, in addition to a GDP shortfall of around 4%, which is the cost of quitting the single market and customs union even with a deal. That is all on top of damage done by the coronavirus. Unemployment is currently forecast to reach 7.4% next year – 2.6 million people. In a no-deal Brexit scenario, that would be higher, too, perhaps by 300,000. If things go badly wrong there could be 4.2 million people jobless by 2022.
Rishi Sunak made no mention of Brexit in his statement to the Commons on Wednesday, although he warned of an “economic emergency” accompanying the pandemic. When subsequently asked about additional risks on the European front, the chancellor declared a deal “preferable” but not something worth “stretching” for.
That is an abdication of responsibility from the cabinet’s second most powerful man. Mr Sunak should be insisting on a deal, not merely hoping for one. He is reported to have lobbied the prime minister in private, along with Michael Gove, whose job at the Cabinet Office involves direct responsibility for no-deal planning. Mr Gove knows the country is not ready.
But no Tory minister dares publicly to doubt the wisdom of crashing out of the EU on hostile terms. All must pay deference to the dream of a “clean break”, which is an old Eurosceptic metaphor for what is, in truth, the messiest and least rational method of detaching the UK from its current high level of integration with its biggest trading partner.
In reality, the demand for maximum separation has already been satisfied. Mr Johnson’s ambitions for a deal were limited to variations of a hard Brexit. The only remaining variable is the diplomacy – whether the disentanglement is achieved in a way that retains some goodwill, or done with rancour and aggression. Either way Britain has years of negotiations with Brussels ahead. There is nothing clean about Brexit. The question for Mr Johnson is not how to break relations even further, but when to start repairing them.