[Economic perspectives 53]

It must be clearly stated that Theresa May’s “deal” was not a compromise at all – it would have been nothing short of a humiliating capitulation.

Let’s be in no doubt – the PM’s proposed “alignment” with the EU’s single market and continuing membership of the “customs union”, and the obligation to continue paying Brussels billions for the privilege, for an indefinite period, without any agreed exit date, is even worse than allowing the UK’s membership of the EU to continue. In simple terms, it is not leaving at all!

The PM’s multiple assurances about leaving put me in mind of David Niven’s reference to Errol Flynn: “You know where you are with him: he always lets you down.”

The widely expressed opinion now heard in the media is that a “no deal” exit would be catastrophic for business, for jobs, for the economy – in short, the worst possible outcome to be avoided at all costs.

Don’t believe a word of it


In my view this is all rubbish. Putting it as starkly as I can, a “no-deal” exit is the outcome I would have voted for at the very outset.

For those of my blog-readers who wish to read no further, all I can say is “Cheers, and thanks for staying with me as long as you have!”

Dose of reality

But if ever there was a time for spelling out the reality, this must be it.

1 – The phrase “no deal” is itself a travesty. It is merely the absence of an over-arching agreement between the UK and the EU. In fact there have already been many, many deals with European bodies in order to promote a smooth transition, and there could be many more. It suits remainers to claim that “no one voted for a no-deal Brexit”, and that its consequences would be disastrous.

2 – The actual consequences would, indeed, not be painless; but nor would they be disastrous. They would certainly involve some economic disruption during the initial months; yet that would be short-lived, depending on how responsive our political and civil institutions prove to be towards our national interests, rather than the existing sectional interests. The abject governmental and political failures of the past three years certainly show that an institutional revolution is now overdue – not merely a change of leadership.

Economic perspective


The sky will not fall in


3 – You won’t hear this on Newsnight or QuestionTime, but in the event of an exit without a deal the sky will not fall in and life will continue without discernible alteration for the majority of citizens and businesses. Putting it into perspective, our exports to the EU represent no more than 12 per cent of our GDP. The mathematicians among you will therefore recognise that 88 per cent of the UK economy is not dependent on trade relations with the EU.

Last week the European chief of a major pharmaceutical giant, asked whether his industry was prepared for no-deal, replied: “ Yes. Business is mostly ready; it’s what business does. It’s only Westminster that is unprepared.”

Last month Joe (Lord) Bamford, Chairman of JCB, expressed it like this: “There is nothing to fear from a no-deal Brexit under which we shall continue to trade under WTO terms. Businesses will adapt. It will not be the end of the world!”

4 – Once we have left the EU, all the uncertainty the media love to spout about will come to an end, and we shall recognise the strengths and opportunities that present themselves. Nor would we have to hand over £39 billion for no value whatsoever!

5 – As for trade, the UK would be able to adopt a policy of unilateral free trade, and any tariffs, quotas and other barriers inflicted by other countries would merely cause harm to their own citizens – not us!

Dreaded Backstop

The backstop is a hoax


6 – As for the Backstop, it is a palpable hoax conjured up by the EU as a deterrent to any future EU exits. In reality, no one wants it or has any intention of imposing it. Both Britain and the EU have made it clear that they would never, on their own initiative, impose a hard border, as indeed have the Irish.

7 – As Roger Bootle pointed out in the Telegraph this week, we have come through other comparable confrontations before now, notably our 1992 exit from the European Exchange Rate Mechanism (ERM), when the usual doomsayers – Treasury, civil service, CBI, Financial Times, IMF, BBC and the rest – went into mourning and warned that national disaster would follow. Our departure date, “black Wednesday”, was – surprise, surprise – followed by an economic recovery and the departure day was relabelled “white”, then “golden”, Wednesday!

Final word

Malfunctioning institutions often cling to the very encumbrances that stifle their ability to fulfil true roles. As Bootle succinctly puts it, a no-deal Brexit would not be a disaster, but “a lucky escape and a blessed release”.