Wednesday, 20 May 2020

Brexit crash on top of a pandemic crash. You really want that?

A no-deal Brexit now looks almost certain, with the latest round of talks between the UK and the EU ending in stalemate, and the negotiations by all accounts turning acrimonious. 

 It’s almost as if the British government wants a no-deal, even though the non-binding ‘political statement’ of the Withdrawal Agreement, approved by the UK Parliament, called on both sides to achieve:

“a free trade area…underpinned by a level playing field”
Both sides are far away from achieving a ‘level playing field’ – with Britain insisting on retaining some EU benefits, with the EU saying you can’t pick and choose, or enjoy EU benefits without agreeing to our rules.
▪ Yes, the country voted for Brexit – albeit by the slimmest of margins, and with only a minority of the electorate voting for Leave.
(Just 37% of the UK electorate voted for Leave – in all other mature democracies across the world that hold referendums on key issues, that would not have been enough for Leave to have won. A super majority endorsement of at least 50% of the entire electorate, and often at least 60%, would have been required before a big change could go ahead.)
▪ Yes, Leave was on the ballot paper, and Leave won.
But when did Britain vote for a No-Deal Brexit?
We’ve never been given any say on what type of Brexit we’ll get – and still we don’t know what Brexit we might get.
That’s like saying to the estate agent,
‘We agree to sell the house. But we’ll leave it up to you what our next home will be.’
The current transition period runs until 31 December 2020, during which time the UK continues to follow EU rules.
After that? We don’t know.
The government responded bluntly last month to an online petition requesting a Brexit transition extension:
“The transition period ends on 31 December 2020, as enshrined in UK law. The Prime Minister has made clear he has no intention of changing this. We remain fully committed to negotiations with the EU.”
As reported by The Week magazine:
‘The EU wants the UK to agree to follow its rules on fair and open competition so British companies given tariff-free access to the EU market can’t undercut their European competition.
‘The EU has warned that the UK won’t be allowed a “high-quality” market unless it signs up to EU social and environmental standards.’
If a deal can’t be agreed with the EU, then the UK will default to World Trade Organization (WTO) terms from 1 January 2021.
Every WTO member has a list of tariffs and quotas that they apply to other countries.
As The Week outlined in stark terms:
‘That means the UK would be hit by big taxes when it tried to sell products to the EU market. The bloc’s average WTO tariffs are 11.1% for agricultural goods, 15.7% for animal products and 35.4% for dairy. 
‘British car makers would be hit with a 10% tariff on exports to the bloc, which could amount to €5.7bn per year. That would increase the average price of a British car sold in the EU by €3,000. 
‘Currently, trade between the UK and EU is tariff-free. But the Confederation of British Industry (CBI) predicts that no-deal would mean that 90% of the UK’s goods exports to the EU would be subjected to tariffs. 
‘WTO “most favoured nation” (MFN) rules mean that the UK couldn’t lower its tariffs for any specific country or bloc, such as the EU, without agreeing a trade deal.’
The EU is the UK’s biggest export and import market by far – almost half of ALL our exports go to the EU and just over half of ALL our imports come from the EU.
Even the UK government, in it’s ‘secret’ but leaked Yellowhammer report last year, detailed how a no-deal Brexit would be catastrophic for the UK, including delays at ports and food and medicine shortages.
And that’s before the government knew anything about the Covid-19 pandemic, which is sending the UK into recession, with unemployment predicted to spiral.
Back in the day, before the referendum campaign, when the Conservative government was pro-Remain, they presented the three main Brexit alternatives – all of which, said the government then, would cause damage to Britain.
① THE NORWAY OPTION – means Britain would leave the EU but still have free and frictionless access to the EU Single Market, by far Britain’s most important and lucrative export and import market. But this option would mean Britain continuing to pay the EU and obey its rules – including free movement of people – without any say in them.
② THE CANADA OPTION means Britain would have tariff free trade with the EU, but not the highly cherished and valuable frictionless trade. And there would only be limited access for our services sector, which makes up almost 80% of our economy.
③ THE WTO OPTION (often referred to as ‘no-deal’) means relying on World Trade Organisation rules. But that would mean new tariffs and complicated, costly procedures on UK trade with the EU, hurting British consumers, businesses and employment. It would also suddenly and catastrophically end all EU membership benefits, affecting all our daily lives.
None of these options were presented as choices in the referendum that voters could opt for. The only option was for Remain, or an undefined Leave.
Before the referendum, Jacob Rees-Mogg proposed a second referendum if Leave won. He said in 2011, when he was campaigning for a new referendum on Brexit:
‘We could have two referendums. As it happens, it might make more sense to have the second referendum after the renegotiation is completed.’
It makes sense now to give people a vote on the type of Brexit we want. Of course, the Tories won’t give us that.
But do remember that when, early next year, the country is likely to be in the middle of two catastrophes: Covid-19, and a no-deal Brexit.
One on top of the other will cause us deep pain.
Given a choice, wouldn't you vote to avoid the second pain, since unlike Covid-19, it is entirely avoidable?
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Other articles by Jon Danzig:
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