Who's threatening who?

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One of the slogans which the Prime Minister and other members of her party are repeating ad nauseam is the one about no deal being better than a bad deal.  It seems to be quite popular with a particular target audience - it’s just about the only line which got her any applause in the non-debate with Corbyn a few days ago.  It’s also one of the silliest things which she’s said – so how come she’s getting away with it?

At an irrational level, I suspect that it may be down to the fact that any compromise in discussions with the EU27 may require some flexibility – for the short term at least – on the question of freedom of movement, and for those who are motivated first and foremost by a desire to keep out foreigners, the economic price of no deal may well be outweighed by the dream of eliminating immigration.  On the other hand, those who are looking more at the economic consequences may well be mindful of the ‘truth’ that it is important in any negotiation that ‘the other side’ knows that if you can’t get a satisfactory deal, then you’ll walk away.  Anyone who’s ever been involved in a commercial negotiation will understand that – it’s precisely because it has a ring of truth about it that it strikes a chord.

Context is everything though.  In a negotiation to secure an improvement on the current situation which is beneficial to both sides, it is an entirely rational position to take.  In those circumstances, if the deal on the table at the end of the day was not better than the current status quo, then walking away with no deal would be a sensible thing to do.  At that point, all existing arrangements would simply prevail, and everything would carry on with no change.  That would be the situation, for instance, if the UK were currently outside the EU seeking entry.

The problem is – and this is why it’s such a silly and simplistic attitude – that that isn’t where we are.  We’re not negotiating for an improvement on our current situation – that was never going to be a possibility.  We’re negotiating to mitigate the economic impact of a decision which we’ve already taken, and the fall back is not simply to stay with the status quo, but to walk away with no mitigation at all.  May’s mantra amounts to saying that ‘no mitigation is better than less mitigation than we want’.  It’s utter nonsense, and no wonder that the EU27 are scratching their heads in amazement.  If the negotiations fail, walking away does not simply mean that the status quo continues; quite the reverse.  Walking away doesn’t take us back to where we were before we entered the EU; it takes us somewhere entirely different.

The UK Government has, it tells us, done little or no work on scoping out what ‘no deal’ looks like, but we know that it means a reversion to WTO rules and tariffs.   We also know that it means a lengthy period during which the UK has to renegotiate hundreds of deals and treaties with other countries.  Since the rest of the EU can’t offer a worse deal than WTO terms, even if it wanted to, I suspect that the very worst deal which could emerge from any negotiations is an agreement on a transitional period during which the UK can start to deal with the incredible amount of detail which needs attention.  The attitude of May and her cabinet seems almost designed to deter the EU27 from offering even that.  Even the worst conceivable deal – agreement on nothing other than a settlement of debts and a transitional period – is always going to be better than no deal at all, but they seem determined to create an excuse for walking away with nothing.

I’m struggling to understand whether they know all this really, and are just spinning a line in the hope of winning a few votes by sounding tough, or whether they really believe what they’re saying.  Perhaps sufficient UK electors may yet be taken in, but I doubt that the EU leaders are going to be quite as gullible as the crowd in that old cowboy film.