As Britain moves closer to negotiations with the European Union, Leon predicts "no deal" is the likely outcome and looks at policies the British government should plan to avoid a cliff-edge exit.
The Prime Minister says: no deal is better than a bad deal on Brexit. So, what are the chances EU leaders are prepared to compromise?
Hello, I’m Leon Hawthorne. We’re talking about Brexit, Britain’s exit from the European Union following last year’s referendum.
Brexit means Brexit, according to Theresa May. And now she’s outlined what she wants from negotiations with the EU.
Britain outside the single market.
Outside the customs union.
Outside the jurisdiction of the European Court of Justice.
And no free movement of people.
All this is music to the ears of hard line Brexiteers. But that was the easy part. Now she has two years to sit down with the EU and discuss two SEPARATE but connected issues… the specific terms of our departure… you now, who gets the furniture, paying unpaid bills… AND a future trade deal.
So, deal or no deal?
Mrs May says she will walk away if offered a bad deal. And the Chancellor has threatened “an alternative economic model” for the UK - such as a low corporate tax regime to attract investment away from the EU - if they don’t play fair.
Opposition parties here keep posturing about what they want in a deal with the EU. This is the worst kind of gesture politics… to say we should get this or that, because we cannot control what the other side is prepared to give.
Here’s the problem. If this were a negotiation between two or three parties, then we would posture, make threats, exaggerate… and at the end of the day, we’d reach a compromise.
But the EU is not one person. Britain isn’t negotiating just with Angela Merkel or Francois Hollande. We are negotiating with the European Commission, the European Parliament, 27 other governments and, in line with their constitutions, as many as 37 other national and regional parliaments.
Any of these parties can veto a deal.
We saw in the recent EU-Canada trade negotiations… how the regional parliament of Wallonia in Belgium effectively vetoed that deal, for several days, despite the fact it had been accepted by everybody else. The same is likely to happen for any future EU-UK trade deal. We are held ransom to the lowest common denominator. This is another good reason why Britain should be leaving the EU. Its structure is simply ridiculous. You cannot negotiate with 50…60 other institutions, each with a veto.
I say: the chances of “no deal” are highly probable. So, the British government should now be actively planning for that outcome.
There should be THREE parallel negotiating teams. One, negotiating our exit terms. A second team negotiating the future trade deal. And a third team planning a “no deal” scenario. I know: how can you reach a deal on no deal. What I mean is by this - resolving easy, relatively non controversial issues that avoid any uncertainty if the bigger issues remain unresolved when the clock runs out.
For example, the European Health Insurance Card allows EU citizens to have free health care in other EU countries. Britain could agree to stay within this regime, or it could create a new insurance scheme for Brits abroad, not dependent on agreement with national governments… just as there is for private health insurance.
But the Prime Minister should publish a wide ranging unilateral “no deal” plan, saying: this is what will happen if we fail to reach agreement. It’s important this happens early in the formal negotiations, so we set a base line and make it public, so there are no fears of a cliff edge or last minute overnight negotiations… all of which unsettle financial markets and ordinary citizens.
Everyone can plan of the basis of “no deal” as the worst possible outcome. Any actual deal will have terms that are the same or better than that. This approach provides certainty and clarity.
It also strengthens our negotiating hand, as it shows the EU: we have no fear.
For example: we could say… in the event of “no deal”, we would immediately… the day we leave… cut the rate of corporation tax to12.5%, the same rate as the Republic of Ireland. We could say we would immediately reduce the rate of VAT, currently controlled by the EU, from 20% to 10% to boost our economy.
Another point: the government has said any attempt to mete out a punishment beating on Britain in order to prevent other countries from leaving the EU will not be viewed as an action by a “friend”. By implication, this means we will treat them as enemies if they start playing silly buggers in these negotiations.
I believe the European Union is a threat to democracy and nation statehood. What started out as a good idea to boost trade and agriculture after World War Two has morphed into this socialist superstate, where Brussels bureaucrats, corporate lobbyists and German bankers can overrule Greek elections and referenda in Ireland, Denmark, Netherlands and France.
Britain’s policy should be to bring about a collapse of the EU. This would be a catastrophe for the political class who make a good living, riding on the Euro gravy train, but it needn’t be an economic catastrophe for the peoples of Europe.
They - just like Britain - can do this is a controlled, orderly fashion and together can share a bright future in a family of independent European nation states.
I’m Leon Hawthorne. Thanks for watching.