No deal: from rank out­sider to front-run­ner

The New European - - Agenda -

The Brus­sels adage that “noth­ing is agreed un­til ev­ery­thing is agreed” is now more than just a cliché about ne­go­ti­a­tions com­ing to­gether at the last mo­ment. It has be­come an ex­cuse for the lack of ur­gency in Brexit talks.

Why else would the ma­jor stick­ing point of North­ern Ire­land and the dif­fer­ence be­tween the type of back­stop en­vis­aged by the UK and Brus­sels be only loom­ing into fo­cus this week?

Theresa May’s strat­egy, of course, has been to take things to the wire to make it look like she’s scored a vic­tory at the last mo­ment. Pre­sent­ing an ul­ti­ma­tum to her party, wider par­lia­ment and Brus­sels of her ver­sion of a good deal – Che­quers – against a no-deal may have seemed like a clever ne­go­ti­at­ing pol­icy, yet it has only made a no-deal more likely.

Only a mi­nor­ity of MPS ever be­lieved Che­quers makes sense, and too many Brex­i­teers are re­laxed about a no-deal, not least – so say the brief­ings – the DUP leader Ar­lene Foster, who, it is said, is now “ready” to trig­ger such an out­come and re­gards it the “like­li­est” op­tion.

What­ever the twists and turns ahead, any deal agreed be­tween the govern­ment and Brus­sels must still be rat­i­fied by the UK par­lia­ment – in­clud­ing the in­creas­ingly re­bel­lious pro-brexit Con­ser­va­tive MPS and the DUP – and all the Euro­pean na­tional leg­is­la­tures. As such, no-deal re­mains a se­ri­ous, and fright­en­ing prospect.

This prospect has in­creased dra­mat­i­cally since last Sun­day’s talks be­tween Brexit sec­re­tary Do­minic Raab and EU ne­go­tia­tor Michel Barnier failed to break the dead­lock. And, again, when the prime min­is­ter went to the Com­mons on Mon­day to head off a po­ten­tial lead­er­ship chal­lenge and the pos­si­bil­ity of cab­i­net res­ig­na­tions, she made clear she was not chang­ing tack from her do-or­die ul­ti­ma­tum. Her two-and-a-half hour cab­i­net meet­ing on Tues­day un­der­lined the PM is re­fus­ing to change course.

As a re­sult, no-deal is no longer merely a worst-case sce­nario in the com­puter mod­els of White­hall and multi­na­tional busi­nesses. In fact, those con­tin­gency plans are not just on standby for March 29, 2019, but are al­ready be­ing im­ple­mented. This week­end marks 160 days un­til Brexit Day, but, in re­al­ity, the UK is al­ready on a no-deal foot­ing.

In the view of Don­ald Tusk, the pres­i­dent of the Euro­pean Coun­cil, a no deal out­come is “more likely than ever be­fore”. It is cer­tainly true that it suits both sides to ramp up the rhetoric to fo­cus the minds of ne­go­tia­tors, yet it would be a mas­sive gam­ble for busi­nesses and govern­ment agen­cies to not take it se­ri­ously. The bet­ting firm Smar­kets this week puts the chances of a no deal at

50%, and although this level is not as high as it has been, it will cause alarm in West­min­ster and Brus­sels.

Se­nior civil ser­vants have told min­is­ters to start im­ple­ment­ing con­tin­gency plans for a no-deal by the end of this month, re­gard­less of any ten­ta­tive deal struck be­fore then. As such, plans for stock­pil­ing medicines must start now, mean­ing there should be a six-week back-up of vi­tal treat­ments in place months ahead of Brexit Day, in case the UK crashes out of the EU. Last week saw the start of build­ing work for a lorry park on the M26 in the event of dis­rup­tion at Dover. Busi­nesses, whose very sur­vival de­pends on the out­come of Brexit and who can­not sim­ply be

A series of cat­a­strophic mis­steps by Theresa May, Ar­lene Foster and oth­ers look like con­demn­ing Bri­tain to the very worst pos­si­ble out­come in the Brexit ne­go­ti­a­tions.

JANE MER­RICK re­ports

by­standers in the po­lit­i­cal game of chicken be­tween the UK and EU, have al­ready started to make changes in prepa­ra­tion for a no-deal.

And th­ese are not empty threats: As­trazeneca, the phar­ma­ceu­ti­cals gi­ant which em­ploys 7,000 peo­ple in the UK, has al­ready ac­ti­vated its con­tin­gency plans, in­clud­ing freez­ing man­u­fac­tur­ing in­vest­ment in the coun­try un­til there is more clar­ity on what a deal will look like. The firm’s chair­man, Leif Jo­hans­son, told Le Monde the firm is stock­pil­ing medicines at na­tional bor­ders and spend­ing £40m on set­ting up new lab­o­ra­to­ries out­side the UK. He said: “If a tran­si­tion deal does not make clear what will hap­pen in the fu­ture, we will main­tain our de­ci­sion not to in­vest.”

Sim­i­larly, car man­u­fac­turer Ford, which em­ploys 14,000 work­ers in the UK, has warned that a no-deal could force the com­pany to change its op­er­a­tions in the coun­try. Steven Arm­strong, the head of Euro­pean op­er­a­tions for Ford, said a hard Brexit is a “red line” that could “se­verely dam­age the UK’S com­pet­i­tive­ness and re­sult in a sig­nif­i­cant threat to much of the auto in­dus­try, in­clud­ing our own man­u­fac­tur­ing op­er­a­tions”.

Of­fi­cially, the De­part­ment for Ex­it­ing the EU main­tains that a no-deal is “un­likely” be­cause of the “mu­tual in­ter­ests of the UK and the EU in se­cur­ing a ne­go­ti­ated out­come”. Last week, the govern­ment pub­lished the lat­est in its series of ‘tech­ni­cal no­tices’ – now num­ber­ing more than 100 – of how agen­cies, busi­nesses and in­di­vid­u­als should pre­pare for a no-deal, in­clud­ing warn­ings to trav­ellers to take out in­sur­ance now for Eurostar trips booked next year, in case ser­vices are sub­jected to mas­sive dis­rup­tion, and the pos­si­bil­ity of an end to free roam­ing for mo­biles for Bri­tons trav­el­ling in Europe.

DEXEU’S lan­guage is cau­tious, in­sist­ing that “it has al­ways been the case that as we get nearer to March 2019, prepa­ra­tions for a no-deal sce­nario would have to be ac­cel­er­ated. Such an ac­cel­er­a­tion does not re­flect an in­creased like­li­hood of a ‘no-deal’ out­come. Rather it is about en­sur­ing our plans are in place in the un­likely sce­nario that they need to be re­lied upon”.

But pri­vately no one in White­hall is pre­tend­ing a no-deal isn’t a highly likely pos­si­bil­ity. There is now a bal­anc­ing act to be per­formed – be­tween se­ri­ous prepa­ra­tion and avoid­ing what Tusk warned in his let­ter could be mo­men­tum to­wards a no deal. But some UK of­fi­cials are con­cerned that May’s long-held strat­egy of “no-deal is bet­ter than a bad deal”, hav­ing started out nearly two years ago as a line to win over Brex­i­teers who had been con­cerned that a prime min­is­ter who had voted Re­main might go soft on Brexit, has be­come an un­break­able shib­bo­leth. Some see it as a “dis­as­ter” that no-deal has been cast as an ac­cept­able out­come.

Labour MP Chuka Umunna said: “There is no doubt about it – crash­ing out with no deal would be cat­a­strophic. If peo­ple don’t be­lieve this, sim­ply read the tech­ni­cal notes the govern­ment has is­sued firms telling them what they need to do to pre­pare for this sce­nario.

Do­minic Raab would have called this Project Fear once upon a time, now the Brexit sec­re­tary is the one is­su­ing the warn­ing no­tices as this dis­as­ter be­comes Project Re­al­ity.”

The con­cern is that, de­spite veiled threats by Cab­i­net min­is­ters at pizza sum­mits this week, May is in a stronger po­si­tion than the chaos around her would im­ply. Brex­i­teers ad­mit there aren’t the num­bers of eu­roscep­tic Con­ser­va­tive MPS to top­ple her in a con­fi­dence vote, even if the tar­get of 48 Tories is reached to trig­ger that vote. The di­ver­sity of opin­ion across the House of Com­mons points, at the mo­ment, to a no-deal by de­fault – as the of­fi­cial Labour line is to vote against any deal the govern­ment reaches that falls short of its ‘six tests’. With the threat of no-deal loom­ing larger than ever, we might need to re­place that old Brus­sels adage with the ques­tion: what if noth­ing is ever agreed?

Photo: @chris­the­barker

NO ES­CAPE: Ar­lene Foster and Theresa May

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