Theresa May's ham-fisted no-deal brinkmanship is the real Project Fear

The Conservative Party would be utterly foolish to jeopardise its apparent reputation for economic competence

Another day, another bumper crop of headlines about preparations for a no-deal exit from the EU in March: some 600 civil servants at the Department for International Development will be redeployed to work on contingency plans; we will be told to get ready to change our diet to cope with food shortages. Perhaps ministers should have saved that one until after Christmas. The government’s guidance removed the word “unlikely” when talking about the prospect of no deal.

On the face of it, ministers are doing the only responsible thing by preparing for the worst. With Theresa May’s withdrawal agreement looking doomed, the UK will leave the EU on 29 March unless a new law is passed to stop it.

Yet I think what the government is doing is irresponsible, by allowing the public and business to get into a state of high anxiety about a cliff-edge departure. I don’t believe that will happen.

The charitable reason why is that May would not inflict a chaotic exit on the country; the less charitable reason is that the Conservative Party would wreck its reputation for economic competence for a generation.

It would long be tarnished by food and medicine shortages and aerial pictures of lorries queueing to get to Dover. Black Wednesday, when the UK was forced out of the European exchange rate mechanism and interest rates soared to 15 per cent, lasted only a day but inflicted lasting political damage; no-deal disruption would last much longer.

Even if May drifted towards an “accidental” no-deal exit, the cabinet would surely halt it. Ministers such as Philip Hammond and Amber Rudd would threaten to resign. So would David Gauke, the justice secretary, as he made clear today.

He got a toy unicorn for Christmas after telling the cabinet it should slay unicorns like a “managed no deal”, not propagate them. But several cabinet ministers support what Penny Mordaunt called a “smooth and managed glidepath”. It all sounds cuddly but has a fatal flaw: “managing” it would require EU cooperation, which is not going to happen. Backers, including Andrea Leadsom, believe the UK could avoid the March cliff edge by bunging the EU £20bn and negotiating a “more minimalist” deal over the next two years.

This assumes the EU will happily wave goodbye to half its £39bn divorce payment agreed with May, and accept an agreement without a backstop to prevent a hard Irish border. The European Commission’s contingency plans, published this week, will protect its own interests, not the UK’s.

Serious figures such as Sajid Javid and Jeremy Hunt should know better than to flirt with such dangerous and naive talk. But they play along with a “managed no deal” in a “look at me” message to Tory MPs and members, not wanting to be left behind in the party leadership race because they backed Remain in 2016.

Even if the cabinet pushed for some form of no-deal exit, parliament would surely find a way to block it. Three Tory MPs, including Nick Boles (who will vote for May’s deal), have threatened to bring down the government, by backing a Labour no confidence motion, if that is what it takes to divert the UK from the cliff edge. A cross-party group of MPs is drawing up plans for guerrilla war in parliament. Even Jeremy Corbyn would not need to hesitate about backing this one; opposing no deal is the one thing that unites his party on Brexit. The number of MPs who actively want to crash out in March is probably no higher than 30 out of 650.

True, a bigger proportion of MPs hope the cabinet’s decision to “ramp up” its £4bn no-deal preparations might prise last-minute concessions on the backstop out of the EU. But ministers have left it too late for the threat to be credible. In Brussels, they devour every word of Brexit coverage in UK newspapers, and rightly sense that the country cannot be fully prepared by 29 March. As one cabinet minister told me: “There was a time when the no-deal card might have worked but the moment passed. We needed to press the button on serious planning in November.” Brexiteer ministers blame deliberate hesitation by May and Hammond.

If you think May might worry about scary “no deal” headlines filling the Christmas news vacuum, you would be wrong. She won’t lose sleep, because they suit her main purpose. When MPs finally vote on her agreement in mid-January, she will argue that the way to prevent no deal is to vote for her one. Not true: if MPs reject her deal, they will get a vote on other options, including a Norway-plus agreement and Final Say referendum. But May is banking on the crude no-deal scare tactics pressurising enough Tory MPs to vote for her deal. It is a desperate move, and the real Project Fear.