To say that Martin Wolf of the Financial Times is pessimistic about the UK’s prospects outside of the EU would be the understatement of the century. Mr Wolf thinks that the referendum was ‘unnecessary’ and that Brexiteers have ‘reduced British politics to its present shambles’.
The UK once had a deserved reputation for pragmatic and stable politics. That will not survive the spectacular mess it is making of Brexit.
Remember what has happened. In an unnecessary referendum, a small majority chose an option they could not understand, because it had not been worked out. Thereupon, a new prime minister, with no knowledge of the complexities, adopted the hardest possible interpretation of the outcome. She triggered the exit process in March 2017, before shaping a detailed negotiating position. Some 70 days later, in an unnecessary election, she lost both her majority and her authority.
The Conservative party is so split over Brexit as to be no longer a coherent party of government. It is, as a result, questionable whether the compromises needed over money owed to the EU, rights of EU residents and the role of the European Court of Justice, could win approval in parliament. The Labour party will offer no relief: it wants another general election and is now about as split over Brexit as the Tories.
Meanwhile, Michel Barnier, the EU’s negotiator, patiently explains, as if to inattentive children, that “the clock is ticking”. In late March 2019, the UK will exit the EU. If businesses are to make sensible plans, they will need to know what is going to happen no later than a year from now. If the deal is to be ratified, it must be sealed by autumn 2018. Moreover, as the EU has insisted, “nothing is agreed until everything is agreed”. Mr Barnier also argues that the UK must recognise that an exit deal will demand a substantial payment. This was in response to Boris Johnson, Britain’s foreign secretary, who remarked in parliament: “I think that the sums that I have seen … seem to me to be extortionate and I think ‘go whistle’ is an entirely appropriate expression.” If the UK sticks to this, there will certainly be no deal, be it a good one or a bad one.
The UK government has failed to prepare the ground for any of the necessary compromises. It could probably not do so, in any case, because a significant number of Brexiters fail to understand the weakness of the UK’s hand: damage to access to the EU market would, for example, be far worse for the UK than vice versa, because the EU’s economy is some five times bigger than Britain’s.
Worse, many Brexiters seem prepared for a “no deal”. But the UK would then, in the view of its most important economic partners, have defaulted on its legal obligations. The EU is a creature of law. Members would view Such a violation of UK obligations as heinous. Anybody who thinks EU members would then co-operate over vital British interests, such as the flow of goods or aviation, is dreaming. Amyas Morse, head of the National Audit Office, has noted that the UK may be unable to process a vastly increased number of customs declarations after Brexit. But this underplays the risks. that will happen to the procedures on the other side?
The UK government is stuck between a rock and a hard place. It will find it almost impossible to agree and implement a sensible deal on the divorce, the nature of the longer-term trading arrangement and the transition in the time available. But it would be even more impossible to fail to do so. Who knows which will win? My guess is that “no deal” is now the more likely. Sooner or later, markets will realise this, too.
That could be destabilising for sterling and cause another spike in inflation. That would create a painful dilemma for the Bank of England. Jeremy Corbyn’s arrival as prime minister could also become more credible. How, after all this tomfoolery, could the Conservatives continue to claim the mantle of sober competence? What would happen then? Many Remainers still hope that, as the economy becomes still worse, the polls showing a continued rough balance between Brexiters and Remainers, will break for the latter, so causing a big shift of opinion in parliament. I see no constitutional objection to a referendum on the terms of Brexit (or the absence of such terms).
Referendums are merely a (dangerous) political tool. But politically another referendum would be dynamite, further aggravating the deep splits over the European issue. The UK has become so ludicrous because the issue of the EU is so deeply felt by a significant part of the body politic. The Brexiters are the Jacobins of UK politics.
Their ideological intensity has devastated the Conservative party and reduced British politics to its present shambles. There is, as a result, neither a comfortable exit from Brexit nor a plausible way of managing it smoothly. Whom the gods wish to destroy they first make mad. So it now is over Brexit.
MARTIN WOLF
Financial Times journalist