Thursday 13 June 2019

NO DEAL IS NOT GOING TO HAPPEN - HERE'S WHY

You will probably know that I have never believed we will leave the EU without a deal. It is not going to happen. All the talk of doing so being put back on the table is quite clearly just a negotiating ploy. I don't believe anyone serious on either side of The Channel thinks otherwise. Johnson is saying he wants to avoid no deal if he possibly can but needs to keep it as an option in order to get a deal. In reality it doesn't strengthen our position as BoJo thinks, it weakens it.

Let's think about this for a minute.

The consequences of leaving without a deal are horrendous. It's a big risk with immense political and economic cost for the British government. By threatening to damage yourself you are effectively using the maximum leverage you've got, something you do only if you were absolutely desperate to get something else. 

Similarly, with the threat of withholding the £39 billion. It's the price that we think the EU is prepared to pay. It isn't the price the EU have put on it, this is our own valuation.  It's a lot of money and it inadvertently reveals how much we value it, how urgently we need it.

So, paradoxically, every time we threaten the EU with no deal we reveal our desperation. It's the suicidal maniac's not-so-secret cry for help.

However, if you don't care for the suicide analogy let's use another favourite of the Brexiteers. They like the car dealership thing. Threatening to walk away is fine - if you do it once and the salesman believes you're serious. A dealer knows the customer who walks away but keeps coming back making ridiculously low but gradually increasing offers is going to buy eventually. Having spent most of my life in sales I know how it works. It's the ones who don't return you worry about. Note that none of the candidates are proposing to just end the negotiations they are all proposing to go back with yet another low offer.

Had we been in a position to trigger Article 50 and immediately plan to leave without a deal, ignoring Brussels completely, they might have treated us differently. It would have looked like we didn't care. But this was always impossible because we do care, it does matter and we desperately need that trade deal. And more importantly the EU know it.

And to show how we cannot leave by the October deadline anyway, look at things that have emerged in the last couple of days.

The great policy of leaving the EU by October 31st and on which the future of the Tory party depends according to Johnson is 'impossible' according to the Chancellor whether we have a deal or not. Mark Harper, one of Bojo's opponents says the same, we simply cannot leave by Halloween.

A leaked cabinet report says the pharmaceutical industry is not ready for a no deal Brexit and needs more time to stockpile.  800 business leaders have written to all the candidates to plead with them to take no deal off the table.

A food industry body says we will probably be OK for a couple of weeks after a no deal Brexit and then food shortages will start to appear. I'll repeat that in case you didn't quite follow. Food shortages will appear within a fortnight of a no deal Brexit.

HMRC figures show that out of the 240,000 companies in the UK that trade with Europe, jusr 69,000 have registered for Economic Operator and Registration Identification (EORI) status and a measly 17,800 have applied for TSP - a sort of provisional emergency get-u-home system for keeping desperately needed imports flowing in the event of no deal Brexit. The government has introduced this because the EU need us more than we need them. EU manufacturers will see their goods coming in pretty smoothly for a day or two, until the empty trucks set off back and join the queue for Dover - at Milton Keynes. Dover having become blocked because France is treating as we have always demanded, as a third country.

Despite all this Johnson insisted that we are leaving on October 31st with or without a deal. He may go down as the first PM in modern times and probably ever in the history of this country to voluntarily and deliberately by means of a flagship policy inflict food shortages on us.

An attempt by the opposition to take control of parliamentary business in order to stop Brexit failed but in my opinion it is a good thing. The new PM (assuming it is who we think it is) will be forced to take the decision himself and shoulder the kudos - or the blame, depending on which way things go.

Jacob Rees-Mogg is full of support for Boris.

"I’m supporting Boris because he’ll deliver on Brexit which people voted for in 2016"

Diary forward a few months and let us see what happens, eh?