A no deal Brexit looks like the best approach for the UK

If the Treasury was being honest, it would admit that EU membership has made little difference to our prosperity

Like almost everybody who voted for Brexit, I wanted to leave the EU with a trade deal. I certainly assumed that we would: it is in both sides’ interests, and EU manufacturers and farmers do especially well from the present arrangements.

I thought the Government would negotiate robustly and sensibly, following Vote Leave’s advice not to trigger Article 50 until the outlines of a deal had been agreed, all the while preparing for a hard exit. I expected the EU to realise that a refusal to play ball would mean a calamitous financial, defence and security hit.

It wasn’t to be. The abject lack of leadership provided by the Prime Minister, the Government’s staggering refusal to leverage the UK’s strengths, its bovine nastiness on the rights of EU citizens and, of course, the fact that so many on the UK side were trying to reverse Brexit, all combined to deliver the greatest failure of British statecraft since Suez.

The EU was emboldened into laying a series of traps into which we jumped enthusiastically, with what ought to have been the minor issue of Northern Ireland’s border turned into a case study in technocratic sabotage.

What now? Tory Remainers are in full swing, threatening either a delay or permanent membership of the customs union and single market – in other words, no Brexit – if MPs don’t sign up to the Prime Minister’s appalling deal. We must hope that, against all the odds, Parliament doesn’t fall for this madness.

Like most Leave voters, my position has hardened. I still don’t relish the idea of leaving without a deal, but I’m now, for the first time, reconciled to doing so. As matters stand, a so-called no-deal (in reality, we’ve already agreed lots of mini-deals) would be our least bad option. It wouldn’t be pretty, especially for one or two industries, but would probably cost just 1-2 per cent of GDP.

Ifo, the German think tank, is even more optimistic: it believes the cost of a no-deal accompanied by radical tariff cuts would be only 0.48 per cent of GDP. Indeed, the Government’s reported plan to eliminate 80-90 cent of tariffs, maintaining protection in only a handful of sectors, would dramatically reduce the net costs of departure. There can be no contest between a Hotel California Brexit or the greatest unilateral reductions in tariffs since the repeal of the Corn Laws.

Even the Bank of England believes the side-agreements it has signed and other preparations have halved the cost of no deal compared to three months ago (and that is before tariff cuts and other, as yet unannounced, palliative measures). The downsides of a clean Brexit have been massively exaggerated, as have the benefits of single market and customs union membership.
To some extent the British government has squandered the leverage, it would have with a no deal exit.  The no deal exit would hit the Eu harder than it would hit the UK.  The one thing that seems clear is that the deal alternative was not a good one for the UK.  It was mostly all cost and few benefits. 

A no deal would allow the UK to cut trade deals with the US and Commonwealth countries that would likely be better than living with the EU control freaks who want to manage everything including the shape of vegetables.  It would relieve them of having to deal with the human rights wackos in the EU who want them to keep terrorist in the country rather than deport them back to their country of origin.


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