Brexit – “Dog’s Dinner Deal”

Brexit; the saga everyone is sick to their back-teeth hearing all about. Respect to you dear reader for being prepared to read yet another blog on this soul-destroying subject. Just think, though, if things had turned out fractionally differently on 23rd June 2016 we could have now been in the penultimate year of a majority Cameron government; a government which might have been focusing on modernising the UK economy to meet the new challenges of AI & Robotics and properly getting on top of the National Debt problem which we used to hear so much about. But this is all irrelevant now because we all know the entire energy of this Parliament has been spent instead walking the Brexit ‘tight rope’ to an inevitable crunch-point in March 2019.

I want to use this blog to state my personal standpoints and also make some predictions of how this saga will achieve closure. I remember thinking on the morning of 24th June 2016 ” Well that’s it then, we have to leave”. What I meant by that is that the democratic process has to be enacted. The vote had a clear majority and a good turnout. No different to any General Election; you may not like a democratic result but it is what it is. David Cameron stated that it was a ‘Referendum not a Neverendum’ and he was absolutely right on this point. So I will be clear; I voted Remain but I accept entirely we must leave the EU. I appreciate there were some underhand tactics employed by both sides in the campaign but the vote was still legitimate. I may not like the result but the democratic process has to be respected. So I can be clear that now the leaving deadline is set I do not believe there should be any second Referendum prior to leaving the EU. Keen-eyed readers trawling through my posts might find the proof I attended the people’s vote march. I did, but I never signed the associated petition and principally went along because I wanted to hear Gina Miller public speak (regrettably an underwhelming experience). The march itself was badly organised with an anti-climatic finale leaving a sense of disappointment. A new referendum vote on the final deal isn’t sensible, practical or achievable. The autonomy of Parliament to sign off the final deal (or no-deal) is sufficient enough rubber-stamping to the conclusion of this sorry tale and prevents the risk of the negotiations being skewed by the looming threat of a second vote.

Brexit does have a few positives! What I hear you say; like what? For one; it is an endless conversation starter in awkward social occasions as everyone has a viewpoint and is keen to tell you theirs. It has also caused a resurgence in interest in Politics particularly amongst the younger generations. I’ll bet that General Election turnouts will be consistently higher going forwards than before the Referendum. Political parties have also been ‘stirred up’ and are having to redefine their core values and fight out internal battles on issues such as immigration. Brexit has also stimulate a sense of national identity. Whilst this has a potential ‘dark side’ a greater sense of patriotism and national focus can help national manufacturing. Brexit has also given Brussels a much needed “kick in the balls”. For too long the European project has been slow to change, prone to corruption and fixated on ‘ever greater Union’. Whatever the outcome I hope the remaining 27 countries push for greater flexibility, accountability and humility from the Brussels elite.

On the other side of the coin Brexit has undoubtedly left the UK sometimes inward-focused and divided by polarised, entrenched opinion. I have no doubt that consensus has not shifted significantly since the vote and the majority of Leave voters still stand by their decision. Big, important economic issues have also been pushed to the sidelines as Brexit agendas have dominated too much Parliamentary time.

So prediction time; where do I think we are headed? I think it is clear that EU negotiators are driven by an agenda to ensure the UK isn’t perceived to leave with a good deal in fear that other countries will look for a similar path. Any deal cannot damage the integrity of the Single Market. The political motivation to leave the UK electorate ‘punished’ is also imperative. The Irish border is an intractable problem whereby a hard land border solution is a politically unusable option for a DUP-controlled Government but is the only inevitable solution for a European frontier land-border in Ireland. I believe the EU are playing the long game with their key objective to make an example of us despite the economic collateral.

Crystal ball time

Difficult to decide whether a no-deal can now be avoided. A bit of a cop out but I will now outline two possible scenarios. If pushed my money’s on the second option: “Dog’s Dinner Deal” simply because a no-deal scenario looks so disruptive and damaging. Please treat these scenarios as simple thought-experiments.

No Deal Scenario A

Negotiations will fail and the UK will stumble into a No-deal scenario. This will probably be apparent by December 2018 by which time it will be too late for parliamentary bodies to ratify any new negotiated agreements before the March 2019 leave deadline. A basic operations framework will be agreed early 2019 to keep planes flying, power flowing through cables and vital commodities shifting. The UK will be given 3rd country status and reset to WTO rules. Hard border infrastructure development in Northern Ireland is demanded by the EU.

The no-deal reality will trigger an immediate leadership election for the Conservatives as Mrs May will step down in admission to failing to deliver her promised “good deal”. The new leader will be chosen with the expectation of a looming General Election. Boris Johnson is eliminated in the first round in a ‘no-deal backlash’ as he is seen as being too unpredictable. Michael Gove is selected as the new leader of the Conservatives in the second round (seeing off alternative contenders Gavin Williamson and Sajid Javid); seen as a safe pair of hands with the required Brexit credentials for the brave (foolish?) new world. The reshuffled minority government will hang-on by a thread with minor collateral damage resignations at cabinet level.

The no-deal Brexit will, by April 2019, be triggering a succession of large-scale redundancies by major UK manufacturers. Supply chains will be ‘just about managing’ to adapt to the new border requirements with shortages of some key products. The Pound will have devalued to Euro parity giving a boost to export values despite new tariff regimes. The FTSE will minimise at 6500; the largest falls happened in December 2019 as ‘no-deal reality’ triggered a fall. The EU will require all UK travellers to apply for Visas (work & holiday types) with long waiting times causing frustration /  travel industry woes and public consternation.

By May 2019 economic problems will be worsening as exporters come under pressure from tariffs. Unemployment will have surged to over 2 million, inflation risen to over 4%, interest rates will have risen to 1.25%. Supply shortages by major retailers will be continuing leading to some panic buying. The NHS will be in the middle of a full blown crisis as staff shortages, drug supply problems and increased demand pile on the pressure.

By early June 2019 a vote of no confidence will be carried in Parliament triggering a new General Election six weeks later. The electorate are in ‘angry mode’ and seek to punish the Conservatives for economic instability and perceived Brexit mismanagement. Labour win a landslide victory in July 2019 with a 90 seat majority with leadership under Jeremy Corbyn. Further falls in the FTSE and inflationary rises continue as Labour begin their dramatic economic reboot project.

The new Corbyn government begins a radical reform programme and state renationalisation drive. A flight of capital from the UK triggers a further run on the Pound. The Labour government is still split over Europe with many wanting a closer relationship and re-membership of the Single Market to bring some economic stability against the instincts of the leadership. Rises in import costs with the weaker pound give a greater emphasis to nationalised production. Negotiations begin for a single market arrangement with the EU but as immigration policy red-lines are crossed stalemate continues under an increasingly hostile backdrop and a war of words.

Pressure mounts from both Scotland and Northern Ireland for UK independence in light of economic turbulence; new Referendums are debated in devolved Parliaments.

 

Last minute “Dog’s Diner Deal” Scenario B (hereby to be known as “triple D”)

November 2018 will be the moment the EU weighs off political pressure with economic necessity. EU negotiators will push brinkmanship right to the calendar limit and then concede a soft border approach for the Irish border to unlock the 11th hour negotiations. A modified version of Mrs May’s checkers proposal will then be mutually agreed. A ‘defibrillated’ checkers is brought back to life despite the protestations of hard Brexiteers.

Can this then be rubber-stamped by Parliament? This would require moderate support by the Labour Party and effectively the fate of Brexit will be in their hands. If they vote against the agreement they will effectively relapse the process to no-deal status as there will be no time to renegotiate a new deal but they would run the risk of being accused of betraying the will of the people. Labour may also wish to grasp the opportunity to trigger a favourable General Election. Their problem is, however, that they will then have ownership of the renegotiation process and risk egg-on-their-face repercussions if they cannot improve on the proposed deal. I believe that, despite the odds, parliament will pass the modified Checkers arrangement with MPs putting constituent’s referendum votes and ‘country before politics’ to save us all from a disorderly no-deal Brexit and ill-timed General Election.

Can Theresa May’s government cling onto power? The debate will rage as to whether the deal is satisfactory and fair enough in the longer term but the consensus will be to soldier on and push on through the March ’19 leave date. Some MPs will resign over the ‘common rulebook’ constraints but a bruised government will limp on through the Spring of 2019 as markets gradually stabilise with confidence growing from a degree of Brexit ‘closure’. The EU will remain the UK’s largest trading partner and there will be no supply crises. UK holiday-makers will suffer the most with long customs delays at European destinations; the travel industry will  be the worst affected sector in Spring 2019.

Will this arrangement be stable long-term? Probably not but the ‘will of the people’ will legally have been upheld and the UK will to all intents and purposes have left the EU. Finally we can all begin talking about the more important changes needed for a modern economy… hallelujah!

Epilogue

Brexit is defining our times and the final path will dictate the fate of the next Generation. At this point it is very difficult to predict the outcome but it is essential that the democratic process is respected. This will be a time of supercharged change and upheaval; there will be winners and losers and UK politics will mutate to a new form. The fact is that 29th March 2019 is not the date we will stop talking about Brexit; it will be around much longer than that.

 

 

 

 

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