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Even Michel Barnier says it’s time to prepare for ‘no deal’ on Brexit

13 November 2017

8:07 AM

13 November 2017

8:07 AM

Today’s Guardian has an odd splash headline, denouncing as ‘Orwellian’ a letter that Michael Gove and Boris Johnson sent to Theresa May warning her that some parts of her government are unprepared for ‘no deal’. I’m not quite sure what’s Orwellian about that, or even so controversial. Here’s the leaked extract of the letter.

‘Your approach is governed by sensible pragmatism. That does not in any way dilute our ambition to be a fully independent self-governing country by the time of the next election. If we are to counter those who wish to frustrate that end, there are ways of underlining your resolve. We are profoundly worried that in some parts of government the current preparations are not proceeding with anything like sufficient energy. We all want you to push your agenda forward with confidence and have your government articulate the following.’

For such a letter to leak is unusual, but its contents are hardly incendiary (or Orwellian). They were warning her that ‘some parts of government’ are not preparing for the failure of talks. The internal politics are well-known: Philip Hammond is very wary about doing so, believing that if plans for ‘no deal’ are created, then his pro-Brexit opponents in the Cabinet will jump down this escape chute rather than pursue a deal. But the chance of ‘no deal’ is quite high: Oxford Economics puts it at about 35 per cent, about the same as a free trade deal being agreed. I’d put the chance of ‘no deal’ slightly higher than an FTA. Given that we’re leaving the EU in March 2019, you’d have to prepare for it now. Failure to do so would be a dereliction of government duty.

I understand that the Gove-Boris letter is one of many memos being written around Whitehall as civil servants envisage a ‘no deal’ situation arriving without the UK having prepared for it, and an inquiry being launched. The civil servants want it on record that they flagged up this danger, and were batted away. A good many people cannot believe that, for political reasons, the Treasury is stopping them make preparations for what is perhaps the single most likely outcome of the Brexit talks.

And now, they have found an unlikely ally in the form of Michel Barnier, who told the French press yesterday that they should prepare for ‘no deal’. It’s not his preferred option, he told Le Journal du Dimanche. He then continued:

But it’s a possibility. Everyone has to prepare for it, governments as well as businesses – we are technically preparing ourselves. On 29 March 2019, the United Kingdom will become a third state. Without a deal, [trade with the UK] would be governed under the the regime of the World Trade Organization, with relations similar to those we have with China [and the United States, the EU’s no1 trading partner]. A failure of the negotiations would have consequences on many levels. On the ability of British planes to land in Europe, the United Kingdom leaving the single sky agreement, or on dogs and cats crossing the Channel! In Europe, everything is integrated because we have common standards: that seems to have been forgotten.

The Brexiteers who thought these talks would be a formality were rather naive. If the EU is preparing itself for ‘no deal’, as Barnier says, then it might be prudent for the Prime Minister to order her Chancellor to do likewise.


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