Mervyn King is right about Brexit. This is the only way to avoid a total shambles

In an ideal world, we would be fully prepared not to have a trade deal, but that’s not the case. Now it’s up to the government to find ways of crafting a path that gets majority support

Lord King – Mervyn King, former governor of the Bank of England – is right. The government’s preparations for Brexit have indeed been incompetent. In his BBC interview in its forthcoming programme on the 10 years since the financial crash, he argued that the eleventh-hour preparations for leaving without a deal had undermined our negotiating position.

“We haven’t had a credible bargaining position, because we hadn’t put in place measures where we could say to our colleagues in Europe, ‘Look, we’d like a free-trade deal, we think that you would probably like one too, but if we can’t agree, don’t be under any misapprehension, we have put in place the measures that would enable us to leave without one’,” he said.

It “beggared belief” that the world’s sixth biggest economy should be talking of stockpiling food and medicines.

“A government that cannot take action to prevent some of these catastrophic outcomes illustrates a whole lack of preparation … It doesn’t tell us anything about whether the policy of staying in the EU is good or bad, it tells us everything about the incompetence of the preparation for it.”

Ouch. So what’s to be done?

Come to that in a moment, because I think there is a fix, albeit an imperfect one. Think instead not about the deal, but rather about the relationship. Both the UK and the EU will continue to change over time, as both have changed since the UK joined. The UK has established separate legislatures in Scotland and Wales, while Northern Ireland has also seen big constitutional changes. The EU has brought in new members and established the single currency, but now faces the clear possibility of becoming a rather looser union, or rather, loosening up its rules on several issues, including budget deficits and migration. In another 40 years, both the UK and EU will look different again. For example, I do not expect the euro to survive with its present membership.

So what we are seeing now is a point along a way. The UK will tend to disengage with Europe not because of any political decision now or in the future, but rather because for demographic and other reasons, Europe will be a relatively slow-growing region. The balance of the world will shift towards Asia, Africa and the Americas, and our focus will shift with it. That is not an argument for Brexit; it is simply an observation about how the world economy is changing.

If you accept this, then what the UK should do is pretty clear. In an ideal world we would be in the position that Lord King (who is, by the way, a Brexiteer) describes: to be able to say we would like a trade deal but would be fully prepared not to have one. We’re not, and there is no time to craft adequate bespoke arrangements. The Chequers proposals, even if they were acceptable to Europe, are messy. So the sensible thing to do is to take an off-the-shelf arrangement and make some adjustments to make it fit.

You can see where this argument takes us. It is the Norway option, membership of the European Economic Area.

This is not ideal. It is a suit that is not a perfect fit. You need, so to speak, to take it in at the waist, lengthen the sleeves, move the buttons, and so on. But you have something to start with. In the case of the UK there will have to be some payment to the EU, but that will be a lot less than membership. There will have to be a deal on migration, but restrictions on movement within Europe are likely to come anyway. The Norway border with Sweden is a model for UK border with Ireland – as indeed are the Swiss borders with the surrounding EU states.

Moreover, EEA membership need not be forever and a day. Nothing is forever, and economics will be the principal determinant as to how the UK-EU relationship evolves. Might this lead to “Brexit In Name Only”? Lord King said this would be the worst of all worlds.

“I think the biggest risk to the UK, and this is what worries me most, is that this issue isn’t going to go away, you know the referendum hasn’t decided it, because both camps feel that they haven’t got what they wanted.”

Here, I would part company with Lord King. He is right that this issue is not going to go away, and both sides will feel disappointed. But that is the nature of politics, and the challenge for politicians is to find ways of crafting a path that gets majority support. The wisdom is in the words of the Rolling Stones 1969 anthem:

“You can’t always get what you want, but if you try sometimes you just might find … you get what you need.”