Now that the prime minister has triggered article 50, the biggest economic risk facing the UK would be leaving the European Union with no deal at all. Some members of the cabinet have said we should prepare for such an eventuality. I am concerned, as are MPs from across the political divide, that this extreme form of Brexit is being talked about with increasing fervour by those who favour a fundamental rupture with Europe.
Its consequences would be very dangerous: this would be an extremely perilous economic path. Leaving the EU with no deal means Britain would default to World Trade Organisation rules with our biggest trading partner. The resulting tariffs on imports and exports would raise prices for British consumers buying imported goods, and reduce the competitiveness of our firms exporting abroad. Nissan recently warned that any changes to its ability to trade with the EU could lead it to reconsider its UK investment, a stark reminder of what no deal could mean in practice.
Crashing out of the EU at the first sign of tension in our negotiations should not be something the government entertains. I do not understand how we can marry the traditional Conservative commitment to free trade with being relaxed about the no-deal option. I agree with the chancellor, Philip Hammond, who said he thought it would be “ridiculous” to leave without a deal.
There are those in my party who argue that because we trade with the rest of the world in this way, it is fine for us to do so with the EU. But the truth is that walking away with no deal would leave the UK trading with Europe on less generous terms than any other country in the G20. This would be unacceptable for our country, and bad news for my constituents.
Proper scrutiny of the negotiations should not be confused with trying to frustrate the referendum result. The country voted to leave and the journey towards the exit door has begun. But if we are to move beyond the arguments and labels of last year, we need a national debate about the choices now facing us.
It is vital to understand what voters expect from Brexit, especially given the lack of a leave manifesto. Polling shows very few expect, or would tolerate, a hit to their living standards. Leave voters were almost unanimous in believing that Brexit was a cost-free option. In the words of the chancellor, “no one voted to be poorer”.
This will be difficult to deliver – particularly outside the single market and customs union. But it must serve as the starting point for the government’s ambitions. The EU has insisted the UK will not be allowed to cherry pickparticular sectors for single market-type arrangements. Even if it were politically feasible, it is unclear whether this would be desirable, given it would inevitably require picking winners and losers, leaving some industries facing less preferential treatment.
No existing EU free-trade agreement allows a third-party country the same degree of market access as being a member of the single market. It will therefore be essential to minimise the cost of a lesser arrangement, and negotiate a new customs co-operation agreement of the deepest kind. We will have to increase capacity to deal with more customs declarations at our border, find ways of minimising the cost of non-tariff barriers such as rules of origin requirements, and negotiate bespoke arrangements to avoid a damaging re-emergence of a hard border in Ireland.
The government will now attempt to put its Brexit plan into action. We should all want it to succeed because we want what is best for our country. But that does not mean everybody must meekly support the idea of walking away without a deal, when we believe it would be a bad outcome. The vote on 23 June was the starting gun, not a finishing line. Democratic debate must never end. Indeed, it is now more important than ever.
Disqus comments