So far there seems to be little discussion as to what is actually going to happen after the 31 October deadline passes, so I thought I’d have a go at working out the possibilites. At the moment it looks like there are three:
1. We gain an extension to negotiations
Matters continue as they stand, although the credibility of the Tory Party, and in particular Boris Johnson, evaporates.
2. We leave the EU with a deal
Given the short time left, this would be a deal negotiated by Boris Johnson’s current minority government, and a deal that Parliament is happy to accept. Even if this is possible, the resulting ‘deal’ is only a withdrawal agreement. Once that’s settled we will start negotiating the trade deal itself, the deal which will eventually establish the terms under which we trade with the EU in every sector, from fishing to financial services, from agriculture to personal data. Negotiating such a wide-ranging trade deal is likely to tie up government business for many years to come.
3. We leave the EU without a deal
The UK becomes a foreign country as far as the EU is concerned: a foreign country with which they have no trade deal, and a country that owes them €36bn (£33bn). According to official figures the EU represents some 50% of our foreign trade, or around 8% of overall GDP. There will be an immediate impact on the transfer of goods and services which will be subject to new regulations imposed by the EU, presumably derived from WTO rules. The Irish border becomes a 300-mile open land border between the EU and the UK subject to no regulations or checks on the crossing of either goods or people. Smugglers are no doubt already making plans.
This will be mitigated by the fact that we will both be operating on the same rules and regulations governing health and safety, employment and so forth, at least for the time being, as we have already incorporated the full body of EU rules and regulations into UK law. On the other hand, they will be anxious to recover their €36bn and establish the status of EU citizens in the UK, and indeed everything else that would have been covered by a withdrawal agreement, so negotiations will continue.
The general election
What ever happens on 31 October, a general election will almost certainly follow. In the event of Scenario 1, large numbers of Tory voters are likely to defect to the Brexit Party, or to the LibDems if they are ‘remainers’. The most likely outcome would be a hung parliament with a loose coalition of LibDem, Labour and SDP holding the balance of power. If this is the case they would either open negotiations on a new agreement that involves us staying within the Single Market, or cancel Article 50 altogether. Either way, the EU would almost certainly cooperate.
In the event of Scenarios 2 or 3, the outcome is less clear. It is unlikely that the Tories would win an outright majority on their own, but in coalition with the Brexit Party they could well form a government on the basis that they have at least delivered on the 2016 referendum.
What is clear is that many high-ranking Tories and supporters and members of the Brexit Party have already been involved in meetings with US representatives and corporations as to possible trade opportunities between our two countries. There has even been talk of a low-tax, low-regulation ‘Singapore on Thames’. The US currently comprises around 19% of our international trade, or around 2% of overall GDP, so such an approach would involve a seismic restructuring of our economy.
It would also involve re-writing, relaxing and even abandoning many of the rules and regulations that govern food standards, health and safety, employment and much else in this country. As a result our regulatory framework would move away from that of the EU, making it harder or even impossible to arrive at any sort of ‘free trade’ deal with our largest trading partner. Chlorinated chicken is just the start of it.
So parliament, and indeed the British public, faces a choice. Either we maintain and work to improve our existing standards with regards to work, food, health and so much more, or we embark on an economic roller coaster that is likely to threaten our jobs and our standard of living, and result in ever increasing inequality. Ultimately, it’s up to you.
Singapore Skyline taken by Erwin Soo at Flickr