With a little over a fortnight remaining before the UK exits the European Union, last minute efforts continue to reach an agreement on the terms of departure. In the UK members of parliament are being asked again to vote on acceptance of the government’s proposed deal. Prime Minister Theresa May has attempted to woo Labour Party MPs with the promise of cash for poor areas in their constituencies and commitments on worker’s rights.
May’s team has frantically been trying to win concessions from Brussels, with further talks over last weekend — for which the UK was urged to bring fresh proposals — on the thorny Irish backstop issue that has so far scuppered May’s efforts to get her deal through parliament, but strong doubts remain on the MPs’ vote going in her favour. Previous conversations with EU negotiators are said to have been “difficult and robust”— but so far fruitless. Technically, the threat of a no-deal exit hangs over this political tussle.
The Organisation for Economic Cooperation and Development (OECD) became the latest body to raise no-deal fears last week, warning that it would seriously undermine the UK’s economic prospects and bring down global growth.
The OECD cut predictions for the UK’s growth to 0.8 per cent this year and 0.9 per cent in 2020 — even if a no-deal outcome is avoided with a Brexit breakthrough in talks.
The Bank of England governor Mark Carney made the same point earlier, though his team also pointed out that the UK was better prepared than the EU — whose member states have been too focused on luring business from London and not focused enough on mitigating the damage to financial stability.
The respected German think-tank, the IFO Institute, has warned that a no-deal scenario would hit Ireland particularly hard — with a staggering 8.16 per cent hit to their economy. German business leaders have been increasingly vocal about the damage that would be caused by a failure to agree an exit deal, as are manufacturers in the UK. One might think all of this would motivate the EU to soften its approach to the Irish backstop and allow May to get the deal approved by parliament for the benefit of all concerned.
However, EU officials seem increasingly confident that the UK parliament simply will not allow a no-deal outcome — and, if they have read the signs (through the media) correctly, why would they go soft on their position?
After all, they have made every effort and been clear on their desire for the UK to remain in the EU. In fact, they have even gone as far as to say in the past that should the UK wish to come back into the EU after leaving, the Union would be agreeable to it. That is the extent of their desire for the UK to remain a member.
It really does seem as if the choice facing MPs in their vote is between May’s deal, an even softer Brexit, or an extension to the exit date on March 29. Of those opposed to May’s deal, only a minority favour no-deal in its place.
The sooner pro-Brexit Conservatives realise this reality, the sooner they can shift their focus to the far more important and complex issue of planning the future trading relationship with the EU.
Meanwhile, former Cabinet minister Nicky Morgan has asked the Treasury to clarify its position on tariffs in the event of a no-deal Brexit following reports they could be reduced by as much as 90 per cent.
Morgan, who chairs the Treasury Select Committee — and strongly backs the UK to remain in the EU— wrote to chancellor Philip Hammond to demand he say whether the lowering of tariffs was current Treasury policy, as “such a reduction would represent one of the largest liberalisation of trade policy in British history”.
Morgan said MPs needed to be provided with an update to the department’s previous economic analysis on tariffs so they would not be expected to “vote blindly” on the Prime Minister’s Brexit deal, which, if rejected, will be followed by a vote on whether MPs want to rule out no-deal. It was reported last week on Sky News that UK intended to cut 80 to 90 per cent of all tariffs on imported goods if it leaves the EU without a deal.
(The author is our foreign correspondent based in the UK. He can be reached on andyjalil@aol.com)
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