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The Tories' strategy of showing how we would fare under a no-deal Brexit is now doing us more harm than good

The impact papers will strengthen the case for a Final Say referendum

Andrew Grice
Friday 24 August 2018 13:56 BST
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Dominic Raab: Government ready to deliver no-deal Brexit

Brexiteer ministers have long believed publishing the government’s preparations for a no-deal exit from the EU was a clever idea. At one point David Davis, the former Brexit secretary, wanted to roll out one big plan per week to put pressure on his EU counterparts to give ground in the negotiations.

Other ministers warned threatening Brussels with a no-deal scenario would cut no ice when the EU27 knew the UK had been slow to draw up contingency plans. But Theresa May gradually warmed to the idea, as the prospect of crashing out in March became real. In recent weeks, ministers and officials have given me six reasons why it was a good plan to publish the “technical notices” that Dominic Raab, Davis’s successor, began to unveil on Thursday.

As ever with Brexit, it was mainly about Conservative Party management. Downing Street hoped the exercise would throw a bone to ravenous Eurosceptics – many of whom would prefer no deal to be agreed and who want May to threaten to walk out of the talks – while also persuading mainstream Tory MPs and the public to rally behind May’s Chequers blueprint and an EU deal based on it.

Today the plan does not look so clever. The Chequers strategy remains unloved in Tory land. Philip Hammond’s explosive and deliberately timed reality check, warning of the “large fiscal consequences” of a no-deal departure, contradicted Raab’s sunny optimism that the UK would be better off outside the EU in the long term. The chancellor’s intervention infuriated never-satisfied Brexiteers who, having demanded the contingency measures, now whinge about a new “Project Fear”.

Another goal of the papers was to reassure a business world increasingly alarmed at the prospect of a cliff-edge departure in March. Although some preparations are better than none, I doubt Raab’s plans will provide much comfort. They need certainty and a proposed transitional period after Brexit – which would be prolonged under the current UK-EU regime until December 2020 – would be lost if there were no deal agreed. A running theme of the government’s preparations for a no-deal outcome was the extra red tape firms would face as a result – another Leave campaign promise broken.

Although Raab said the UK would take unilateral action to limit disruption in the event of a no deal outcome – in practice, sticking to EU rules and standards – he cannot guarantee the EU will reciprocate. What officials call a “quick and dirty deal” would probably be cobbled together at the last minute to keep planes flying and minimise the chaos at borders, but many companies would still be left in the lurch. Brussels insists there cannot be parallel negotiations on a “no-deal deal” while formal talks continue, and the EU’s room for manoeuvre will be limited by the legal constraint of the UK being a “third country”.

An unstated reason for issuing the contingency plans was to try to limit the political fallout from a chaotic exit in March. Imprinted on Tory minds is how the party lost its reputation for economic competence on Black Wednesday in 1992, when interest rates shot to 15 per cent as the UK left the European exchange rate mechanism. However I doubt the public would be forgiving if ministers said they had tried their best to avoid chaos, but failed.

As well as highlighting the risks to the EU of no agreement being reached – with the aim of forcing concessions – ministers hope their preparations will deflect blame for any failure to reach a deal on to Brussels. I doubt this will work either. Michel Barnier, the EU’s chief negotiator, has already seen this one coming. “The EU will not be impressed by a blame game, and everyone should understand that,” he said.

Watching Raab’s speech, I scribbled the words “presentational nightmare”. How do you sound reassuring about something that could be disastrous, with consequences beyond your control and that you don’t want to happen but might be powerless to stop? The task will not get any easier; the word in Whitehall is some of the other 50 or so papers could highlight even bigger problems. The first 24 did not cover citizens’ rights or the intractable Irish border question.

Unintentionally, Raab turned May’s “no-deal is better than a bad deal” mantra on its head. As a Brexiteer, he believes the former. The irony is May might not mind, if Tory MPs and the public don’t. A vague, bad deal a stumbling, exhausted PM carries over the line on 29 March might now be as good as she can get, with key questions about the future UK-EU relationship put off to another day.

Far from building parliamentary or public support for May’s strategy, the no-deal preparations show how disruptive such an exit would be, and remind us Brexit is not yet a done deal. If there is no progress in negotiations soon, this exercise will strengthen the case for MPs to prevent a disastrous no-deal departure – and vote for a Final Say referendum.

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