Fraser Nelson:
Enthusiasm for exiting without an agreement is growing, and it remains a realistic option
At the start of last year, Theresa May deployed a new phrase to define her tough approach to Brexit: that “no deal is better than a bad deal”. It was dropped into the middle of a speech without very much fanfare, so her aides drew attention to it afterwards in case anyone missed the new threat.
She wanted it to be known that, unlike David Cameron, she would play hardball with the European Union. His error had been to try to renegotiate the terms of Britain’s membership without saying he’d walk away if he didn’t get what he wanted. She would not be so naive.
How distant that all seems now. It has been almost two years since the referendum and Mrs May has proven unable to negotiate with her own Cabinet, let alone the EU. She’s not playing hardball. She’s in the dressing room, agonising over tactics while the other team awaits her. The longer she prevaricates, the weaker she appears and the less likely she is to secure a decent Brexit deal. As if preparing for her failure, her aides are now drawing up backup plans.
The latest such plan – effectively staying in the customs union for several years – is the kind of proposal that certain Brexiteers will find a betrayal of Brexit and the referendum result. To remain in the EU system, unable to cut trade deals with the United States or anyone else, taking dictation while being unable to influence the rules: what would be the point of leaving? To at least a dozen Tories, perhaps more, it would be better to have no deal at all.
This is, still, an option – whether Mrs May likes it or not.
It’s sometimes said that there is no support in Parliament for a no-deal Brexit, but this overlooks a fairly important point. When MPS gave the Prime Minister permission to invoke Article 50, serving divorce proceedings to the European Union, this became the default position. As last year’s Supreme Court drama reminded us, no further debate is needed: a no-deal Brexit will begin in March next year unless Parliament votes for another option. And if the Tory Brexiteers don’t like Mrs May’s compromise, then their own backup plan will be activated.
The plans for a no-deal Brexit are not very advanced but ministers involved regard them as perfectly workable.
It would mean trading with the EU as we currently trade with the US, under World Trade Organisation rules with tariffs (averaging about 4.2 per cent). To implement this properly would mean a massive expansion of ports, with far more customs inspectors.
Even when Mrs May was keen on the no-deal option, her Chancellor, Philip Hammond, was reluctant to authorise money being spent on this contingency plan. Nor have civil servants been in a rush to do much work on her project.
Hammond’s subterfuge has been successful, up to a point. The no-deal preparations have been so pathetic as to persuade the EU that Mrs May has no other option but to sign. There is no extra capacity in Dover, no agreement on how airlines would operate under a new system: most ministers are deeply fearful of the prospect. Nor have the Dutch or Belgians done anywhere near enough work in the ports that handle trade into Britain. To embrace no deal would be incredibly messy, and difficult.
But not impossible. The plan, at present, is for a no deal-lite. Instead of scanning every single lorry arriving at Hull from Rotterdam, about one in every 100 would be checked. For the first few months of a no-deal Brexit, visitors would keep arriving through the “EU” roads and corridors, and not much would change.
The UK government could decide to phase in tariffs: expensive, but still doable. A traffic procedure, Operation Stack, would be used to park lorries on motorway lanes if the route to France becomes clogged up. As one minister puts it, smuggling from EU countries would be no more of a problem in June 2019 than in February 2019.
Then come the advantages, which Brexiteers are talking about with increased enthusiasm. All import tariffs can be cut on goods that Britain doesn’t really make – such as certain lines of footwear and clothing. We’d be under no obligation to pay a penny of the agreed £37 billion to the EU, which is intended as cash to pay for a free trade deal.
There would be massive disruption, to be sure, but a great many Conservatives believe the chances of life in Britain going on pretty much as before are reasonably high. And that the same could not be said for the EU, which would be facing a rather large hole in its budget.
It all adds up to a reasonable threat, but it’s not one that Mrs May is inclined to make. This is understandable, given what happened in the last election. Had she won a 125-seat majority she’d be indomitable. Terrifyingly so.
But as things stand she can’t even persuade colleagues to choose between her “customs partnership” or the “Max Fac” deal favoured by the Brexiteers. Michel Barnier, meanwhile, lets it be known that he doesn’t like either option and might reject both.
He ought to be careful. Last time, the EU badly misjudged the British. Sending David Cameron back to London with a deal barely worthy of the name was – for the EU – a calamitous decision that led directly to Brexit. Giving Mrs May the same treatment would, in effect, dare Tory Brexiteers to vote down her deal, and dare them to try the no-deal option now being prepared.
Mr Barnier needs to realise that whatever he agrees needs to get past not just Mrs May but the likes of Jacob Rees-mogg, who is regarded as a wimp by some of his more hardline Eurosceptic colleagues.
The Prime Minister was quite right to say, in last year’s election, that she needed a strong mandate to negotiate a strong Brexit. Her failure to achieve one has meant she is now dependent on a group of MPS who do not believe they need to agree to a deal at any price, and are quite happy to test the alternative – if pushed too far. The question is whether this is a risk that Mr Barnier wishes to take.
follow Fraser Nelson on Twitter @Frasernelson; read more at telegraph.co.uk/ opinion