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13 March 2017

Why no deal with the EU isn’t better than a bad deal

The consequences of failing to reach an agreement will be economically and politically punitive.

By Stephen Bush

Remember when Britain would get a good deal because the Germans had to sell us all Mercedes? (Mercedeses? Mercedii? I digress.)

Well, that line has slipped a little bit. Now we’re told that “no deal is better than a bad deal”, and that no deal is a situation that we have to prepare for.

Seeing as the consequences of “no deal” include a 15 per cent tariff on all food coming in and out of the EU and a 36 per cent tariff on dairy, plus a hard border between Northern Ireland and the South, it’s hard to see how that can possibly be true, but there you go.

The fear among Conservative MPs who voted Remain is that when their Leave-supporting colleagues talk about the benefits of leaving without a deal, they are actually laying the groundwork for just that.

The counter-argument from most of those pushing the “no deal is better than a bad deal” line is that signaling the United Kingdom’s willingness to walk away from the table increases our leverage. And it is true that on the matter of our continuing contribution to the budget talks and our contribution to Europe-wide policing and defence, there are risks to the EU if there is no deal on the table. Although Britain’s leverage is written up in some places it does exist.

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But the difficulty is that the message that we are hoping to send is “We’re crazy enough to walk away”, but what is being heard in most European capitals is “It would be crazy to walk away”. Many international negotiations start with a dialogue of the deaf but the problem with the Article 50 process is it contains no real staging posts where both sides can realise they are talking past, rather than to, one another.

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Which means that the possibility of exiting without a deal shouldn’t be ruled out.