Sunday 14 July 2019

NO DEAL BREXIT - THE THREAT IS STILL AN EMPTY ONE

Years ago, I used to travel around the country with a sales director who drove ridiculously fast and often (several times a trip I'm talking about) got into potentially awkward and what seemed at the time, life threatening situations. And of course, it wasn't the threat to his life or anyone else's for that matter, which worried me, it was my own. This often resulted in me (others did this too, I'm not a particularly nervous driver!) pressing my feet into the bulkhead on the passenger side as if it was an emergency brake.

He would be doing the same on the pedal on his side of course and the car would be standing on its nose with me braced, wide-eyed, waiting for the collision - which fortunately never came.

Once, after he had spotted what I was doing, he turned to me as we resumed normal progress and said, "I noticed you were helping me there. Don't worry, I value my life much more than I do yours".

I recall this whenever I hear Boris Johnson saying we're going to leave the EU on October 31st 'do or die' and with or without a deal. We are never going to leave without a deal. Take this as read. My old sales director was of course right and BoJo will prove no exception to this rule. He will value his own job far more than anyone else's.

With this in mind, I see George Parker, the FT's Political Editor, has written a piece this week along with Sebastian Payne and James Blitz about that very topic (HERE). They begin:

"Boris Johnson fears a grisly political fate awaits him if he becomes Britain’s prime minister and breaks his promise to take the country out of the EU on October 31. Asked this week if Conservative activists would cut up their membership cards in protest, he joked: “They will cut me up, I expect.”

They go on to say:

"What once seemed unthinkable is now being presented as plausible or even highly likely. The question for business, the markets, the British public and the UK’s trading partners is no longer whether a no-deal exit is a possibility, but whether it can be avoided".

I would urge the FT to keep calm and carry on. When it comes to the crunch Johnson will back down.

This morning, the BBC have a report (HERE) about Phillip Hammond warning in the event of a no-deal outcome Britain would lose control and cede it to the EU27 and private industry.  The government may think its prepared (although it isn't) but they will have next to zero influence on what happens in Calais for instance or in the thousands of companies that trade across the border with the EU.

In the BBC report, David Davis concludes that many people in Whitehall did not believe no deal would ever happen - despite two years of planning. 

"I've got to be able to say to you [the EU] 'if this doesn't work we'll leave anyway' and you've [the EU] got to believe it. 

"And for you to believe it I've got to believe it. And I don't think Whitehall really ever believed that they would actually carry out the plans we laid so carefully over two years."

You see, it's all about belief isn't it?  We've got to believe in Brexit, in a no-deal Brexit and in the threat that a no-deal Brexit is actually possible so that the EU will then be convinced..  Believe and it will all work out well as if it's a combination of self-help therapy and sheer animal cunning.  The problem is the outcome would be cataclysmic for us.

Sir Ivan Rogers, Britain’s former ambassador to the EU, says a no-deal outcome is likely to lead to “disruption on a scale and of a length that no one has experienced in the developed world in the last couple of generations”.

The Chancellor, warns of a £90 billion hit to the economy.

The UK Trade Policy Observatory, in a new report says a no-deal Brexit will cost £22 billion per year in support for businesses damaged by loss of frictionless access to the EU market - and this doesn't even cover services like banking and financials, the bulk of our economy.

This is not even to mention the Irish border troubles or the break-up of the United Kingdom.  

Will Boris want to be the PM that presided over this? Will he want to be the one to go to Buckingham Palace and sit with HM The Queen or King Charles and tell him or her the Union is broken and they're now monarch of a slightly smaller country?

No, the answer to all these questions is a profound no. He isn't going to do it and the EU know he isn't.  It is the rattle of simple men.