‘No deal’ is our best negotiating tactic
The Government’s approach to the Brexit negotiations contains a fundamental flaw: there is no Plan B. The “no deal” scenario ought to be the Plan B, and could be if it was properly and visibly bankrolled, and if the Government convinced everyone that, though it would be a challenge, it could also be an opportunity. Instead, whatever preparations are taking place are near-invisible, while the rhetoric around “no deal” suggests the apocalypse: no medicine, no food. Emmanuel Macron must look at Theresa May and wonder if he is speaking to a negotiator or a beggar.
The Governor of the Bank of England has made things worse. In an interview yesterday, Mark Carney said no deal was “highly undesirable” and mentioned a shock scenario, modelled by the Bank, in which property values fall by a third, interest rates jump to 4 per cent and unemployment hits 9 per cent. This sounds distressing until one realises, as Mr Carney said, that it is the job of the Bank to consider every scenario in order to ensure Britain’s financial sector is prepared for the very worst, and Mr Carney confirmed that there is enough capital and liquidity in the system to cope.
In other words, Mr Carney could have stuck very carefully to a narrow definition of his job and shared only the relevant data. But it’s fairly obvious that he doesn’t like Brexit, he sees it doing great damage and he has blurred the line between economic forecast and political commentary. Project Fear continues, which is hardly surprising given that the same establishment that campaigned against Brexit is still essentially running the show.
What was supposed to have changed, however, was the Conservative Party, which declared confidently in its manifesto that no deal is better than a bad deal. That doesn’t mean no deal is desirable: on the contrary, it is to be avoided. But the idea that Britain could always walk away from the negotiating table if it so wished is essential to getting the best deal possible – which is why it is so strange, so self-lacerating that Mrs May and her team are treating no deal not as a Plan B but almost as if it were a national suicide pact. Why would the Europeans make any concession to a Britain that is essentially saying: “Give us Chequers or we will self-destruct?” That’s not a threat; it’s a cry for help. Until the Government changes its tune, it will be negotiating from weakness, which is a betrayal of Britain’s tremendous strengths.