No deal ‘offers trillion-pound boost’

Little is clear except that the UK could be heading for a major constitutional and political crisis

A NO-DEAL Brexit would boost the UK economy by £1.1trillion over 15 years, Jacob Rees-mogg will say today, as he argues that crashing out of the EU is preferable to Theresa May’s Chequers plan.

The leader of the 60-strong European Research Group of Conservative Eurosceptic MPS will say there is nothing to fear from a no-deal Brexit, as Britain’s trade with World Trade Organisation (WTO) countries has grown four times faster than trade with countries that have a deal with the EU.

He will also claim that trading on WTO terms would reduce food prices by up to 8 per cent, providing the biggest benefit to the least well-off.

Mr Rees-mogg’s intervention will mark the beginning of a concerted effort by Leave-supporting MPS to kill off Mrs May’s preferred Brexit plan, which they say would lead to “Brexit in name only”. Brexiteers claim that up to 80 Tory MPS are prepared to vote against a deal with the EU if it is based on Chequers. Meanwhile, by last night 25 MPS had put their names to the new Standup4brexit campaign, with the slogan “Chequers is not Brexit”. They include Iain Duncan Smith, the former Tory leader, Priti Patel, the former international development secretary, and Steve Baker, the former Brexit minister.

However, William Hague, who preceded Mr Duncan Smith as Tory leader, warns today that Britain will find itself in “the most serious constitutional crisis for a century, and possibly two” if rebel MPS carry out their threat to block a Chequers-based Brexit deal.

Writing in today’s Daily Telegraph, he says Supreme Court judges would end up having to decide on what the EU (Withdrawal) Act required the Government to do in such circumstances, and that “some MPS would start appealing to Buckingham Palace to intervene, dragging in the monarchy as well”.

Meanwhile it emerged that Boris Johnson, the former foreign secretary, will make a tub-thumping Brexit speech at a Tory conference fringe event the day before Mrs May makes her keynote leader’s speech, threatening to overshadow her attempts to restore her authority over her warring MPS.

Mr Johnson will address an audience of around 700 people at the event organised by the Conservative Home website in the early afternoon of Tuesday Oct 2, with Mrs May speaking the next morning.

It means that he is likely to dominate headlines on the morning of her speech, which will set out her plan for the party winning the next general election. Mr Rees-mogg will speak today at an event in Parliament hosted by Economists for Free Trade, when he will argue that a Canada-style free trade deal with the EU would be the best option for Brexit, but that no deal would be “a very good second best”.

He told The Telegraph: “Leaving the EU on World Trade Organisation terms would lead to a quite remarkable economic advantage for the UK.

“Economists for Free Trade have calculated that a WTO agreement would result in a £1.1trillion boost to the economy over 15 years, because our trade with WTO countries has grown four times faster than our trade under singlemarket terms. Prices would go down by as much as 8 per cent for some basic items such as food and footwear, meaning it would provide the biggest benefit to the least well-off.”

In Slovenia, Michel Barnier, the EU’S chief Brexit negotiator, told a conference it was “realistic” to believe a deal can be reached on Britain’s withdrawal from the EU by the end of October. Such a deal would include an agreement on the Irish border but would not include the terms of Britain’s future trading relationship with the EU.

With 199 days to go to the date set for Britain to leave the European Union – March 29 2019 at 11pm – it is worth thinking about what will happen between now and then if everybody means what they say. For if they do, the United Kingdom could be headed for a major constitutional and political crisis, and it is best to be aware of that before further, and still more trenchant statements are made.

A very long list is developing of ideas that various participants are dead against. Steve Baker, Conservative MP and former minister, has said that at least 80 fellow Tory MPS are prepared to vote against a deal with the EU based on the Chequers proposals of Prime Minister Theresa May. Nick Boles, one of his colleagues, has said that a minimum of 40 Conservatives will, by contrast, vote against leaving the EU with no deal at all.

The Labour Party is against any deal that doesn’t give us nearly all the advantages of staying in the EU, even though they accept we are meant to be leaving it. And Scottish Nationalists and Liberals are, of course, against any aspect of implementing Brexit at all.

So what on earth – anyone trying to plan their business, or just worried about the country could be forgiven for asking – is going to happen?

First, let us assume that a deal is done. The EU realises Mrs May has no negotiating room left, moderates its stance, somehow agrees a compromise on the Irish border, and strikes a deal based on the Chequers proposals. There is now talk of a deal being done in November, which means that it might just happen in December.

Under the European Union (Withdrawal) Act passed in June, any agreement can take effect only if approved by the House of Commons – and indeed a great deal of legislation including a whole new Act would need to be passed as well. Take the 80 MPS at their word that they will vote against it. That would mean it could be passed only if around 70 Labour MPS voted the other way and supported it.

The chances of such a large number of Labour MPS rescuing the Government from an impending crisis, even with so much at stake for the country, is virtually zero. While a few of their bravest and most principled members have indeed voted with the Government in close divisions in recent months, there are not many more who would risk being blamed for a Conservative ministry continuing in office. So the deal with the EU, painstakingly assembled, would be defeated.

It is possible that at this point the Government could collapse, unable to agree on what to do next. But let us assume, as could happen, that it instead proposes to leave the EU with no deal, either because the only deal available has been defeated in this way or because no deal could be struck anyway. What then?

The Act says that by the last week of January, in these circumstances, the Commons must consider a motion on this situation. Now the other Tories who know what they are against kick in – they are against leaving with no deal. Imagine they put down an amendment to defer the date of Brexit by six months and hold a second referendum on what to do next. Jeremy Corbyn agonises about what to do but, under pressure from the trade unions and activists seeing a chance to upset the whole political system, decides Labour will vote for the amendment.

The Commons thus votes to delay Brexit and to hold another referendum. So that’s decided then? No, wait a minute. The Act says that a regulation would have to be passed to change the “exit day” and only a Minister of the Crown can initiate that. The Government refuses to do so and says Brexit must go on. Only they can put forward legislation to hold another referendum, at least with any chance of passing it, and they announce they will not do that.

By this point we are well into February and a total impasse has developed. The Government is not only unable to pass a deal but even unable to pass laws and arrangements necessary to leave without a deal. Parliament is in favour of a new referendum and a delay but unable to pass the laws to facilitate what it wants without the co-operation of ministers. Complete with an atmosphere of intense recrimination and abuse, it would be no exaggeration to say that this would be the most serious constitutional crisis in Britain for at least one century, possibly two.

It would not be long before a case would be heard in the Supreme Court to decide on the interpretation of the Act, bringing the judiciary into a vast political decision. Some MPS would start appealing to Buckingham Palace to intervene, dragging in the monarchy as well.

The crisis could precipitate a general election, either through some Tories joining a motion of no confidence or the Prime Minister deciding it was unavoidable. In that case, exit day would indeed have to be deferred, and the EU would agree to it in such circumstances since it would hope we would never leave. From such an election, anything could emerge – not only a Corbyn government or the long agony of another referendum, but quite possibly both. Or, on current polls, another hung parliament and the crisis still unresolved.

The outcome of such a sequence of events is unknowable, except that it would either be that we leave the EU accompanied by unremitting domestic chaos, or that we stay in it, despite the clear result of the vote in 2016. Either eventuality would cause grievous harm to the country, its international reputation, our economy and the standing of our politics. And before Brussels starts licking its lips over this, the uncertainty or sudden exit would cause massive problems for the Irish Republic and other countries, too.

Perhaps it is alarmist to describe such a scenario. But it is worth thinking about because everyone in parliament who is enjoying making categoric statements about being against Chequers or against “no deal” is now loading the revolver for a game of Russian roulette, with a lot more than Brexit at stake. With strong feelings aroused about what is in the national interest, that interest would be served best of all by some reflection on what could soon transpire, and on how to avert it.