It is now obvious – I guess it was all along – that the Remain-supporting establishment always intended to dilute Brexit as much as possible. BRINO – Brexit in Name Only – was always the plan. Prospects for a Clean Brexit seemed doomed when Theresa May apparently secured full Cabinet agreement to the Chequers Plan –and the further concessions implied by it – that was the natural outcome of this process. However, that weekend turns out instead to have been the point when the BRINO coup overreached itself and began to unravel. I now believe that the “coup” has failed, and that a Clean Brexit – either through a Canada-style agreement or through a “No Deal” – is after all going to happen. The following are my reasons for this view:
- The first signs that BRINO was unravelling came when David Davis and Boris Johnson resigned from Cabinet, followed by several junior ministers (notably Steve Baker) and other MP’s holding minor posts. Other Cabinet ministers have still not given public support to Chequers.
- Further unravelling occurred when it became clear that Chequers had gone down like a stink-bomb in church amongst Tory Party members, and Brexit voters in general. Over the summer recess MP’s have got this message in no uncertain terms from their constituents. Opinion polls back this up. Support for Chequers amongst Tory MP’s seems to be eroding rapidly.
- Although the EU – anxious not to destabilise Theresa May any further – has not aggressively rubbished the plan it has made it clear that many aspects of it are unacceptable. The PM’s position is now so weak it is hard to conceive that she could make any further concessions to the EU.
- A key aspect of the EU’s rejection of the plan is that allowing the UK to diverge on services regulation would cause serious competitive damage to their economy. According to credible media reports – not denied by Downing Street or the EU – Michel Barnier’s senior economist calculates that this divergence would lower the EU’s growth path by 8-9% over 15 years. Furthermore, Mrs May seems to have persuaded the EU not to make this information public. This situation is replete with irony. A key Remain objective is to keep the UK as closely aligned as possible to the EU post-Brexit. Yet here we have the EU itself pointing out how powerful the impact of UK divergence would be! You might think that Mrs May would be able to boost support for the Chequers plan by pointing this out. But if this true of services then it must be true for goods as well. What price then the ludicrous UK Treasury forecasts which show no benefits from Brexit? It seems that the EU is far more positive about Brexit’s potential impact on the UK than the UK government!
- For most of the time since the Referendum the anti-Brexit campaign has made the running in the media. The media itself remains largely anti-Brexit and has in recent weeks been feasting on ludicrous scare stories about No-Deal. The pro-Brexit groups largely shut down, and some of the key Brexit figures were effectively silenced by being in office but not in charge. Mrs May’s stated aim was to implement Brexit but she proved to be very poor at selling the policy. In the face of sustained negative media coverage, and a grossly incompetent UK Brexit negotiation strategy, it is therefore remarkable that support for Brexit has remained so steady. A key change now is that Brexit is getting it’s voice back. Johnson, Davis, Baker and others have since made a powerful case for Clean Brexit, both inside and outside Parliament. There is a lot more of that to come. Pro-Brexit organisations are stirring back to life.
- Those supporting Chequers have said to its pro-Brexit critics, where is your alternative? This was never a fair criticism since the alternative was in the White Paper that David Davis’s department was producing and which was sabotaged at the last minute by Mrs May and her Brexit adviser Olly Robins. That original White Paper – a trade deal based on the EU/Canada deal plus plus – can still form the basis for a deal with the EU. EU Commission President Donald Tusk offered such a deal in March, and Mrs May allowed bogus arguments about the N.Ireland border issue to take this off the table. Jacob Rees Mogg’s ERG (European Research Group) is currently preparing a proposal for a trade deal on these lines, as well as innovative and positive unilateral steps on issues such as tariffs and citizens’ rights that can be taken in the event of No Deal. These detailed proposals should be ready in September and will likely form the basis of the Clean Brexit alternative to Chequers.
- One positive outcome of the Chequers agreement was accelerated planning for a No Deal. Details of this planning are being revealed in stages. It is self-evident that such preparations are both sensible and necessary in themselves and crucial in reinforcing our bargaining power with the EU. This penny at last seems to have dropped with at least some parts of government. The EU will be fully aware that pro-Brexit forces are now marshalling strongly, both inside and outside Parliament. They can no longer be complacent about the possibility of No Deal or its likely negative impact on them.
- The EU’s intransigence is also likely to be further eroded by an almost certain major escalation of the Italian crisis in coming months. The ECB will halve its purchases of Italian bonds in October and cease them altogether in January. Spurred by the Genoa Bridge tragedy the new Eurosceptic Italian government has accelerated plans for a major fiscal expansion. Italian bond yields have already risen markedly and the combination of these factors will push them much higher still. Given the scale of its National Debt, and the restrictions of Euro membership, Italy will then be forced to request massive financial aid from the EU. This will be denied. How the crisis unfolds from there is not a subject for this article, but the bottom line is the EU can ill-afford a damaging failure to reach agreement with the UK as well. Mr Barnier says “the clock is ticking”, but it is ticking for the EU too.
I have no doubt the next few months will be dramatic and turbulent. Will Mrs May change tack? Will she be replaced? By whom? When, and how? Will there be an agreement along Canada plus lines, or will there be a No Deal? If No Deal, will it be acrimonious or business-like? Could EEA membership provide a politically manageable halfway house to full exit from the EU- and a better one than the transition period – as argued in recent seminal pieces on Briefings for Brexit? Out of this fog of uncertainty one thing seems clear to me: A Clean Brexit –whether achieved in one go or in stages – is now far more likely than a Chequers-based deal.