Deal Or No Deal - What The Hell Now?
Last night saw another catastrophic defeat for Theresa May's Tory government by a losing margin of 149 votes - the fourth largest in British parliamentary history. A 'No Deal' vote looms this evening and so, the question hasn't yet been answered - where the hell do we go from here?
As we've discussed previously, a 'No Deal' exit from the EU would hardly be the best outcome for both the country and our economy. It's not necessarily an economically viable option if the Bank Of England's report is to be believed; 8% knocked off of the UK's Gross Domestic Product would take many years to recover from, especially with such a low base interest rate. With such a low base rate currently, there is very little movement with regards to the stimulation of economic growth - half a percent here and there is bound to make absolutely no difference to a rise in GDP. With 'No Deal' comes no twenty-one month transition period to adjust to living without the European Union, which Theresa May included on her Deal that was voted down last night. As a result, businesses would have no time to adapt to changes and prepare for Brexit; in other words, they are thrown straight in at the deep end.
In the way of trade, the UK would revert to World Trade Organisation (WTO) rulings and possibly be subject to the EU's external tariffs on goods entering its confines as Britain would not be part of the single market, causing us to become exempt from the EU's 'free movement' principles. Therefore, whilst Britain are free to then make their own trade deals with other nations, such as the United States, these are not instantaneous and could take months to discuss and then implement, which only furthers the economic uncertainty with large time lags. Prices on British goods may increase further with rising production costs due to imported raw materials from abroad. It should be made clear that the UK manufactures very little these days and so, these price rises due to tariffs on imports seem rather likely. Manufacturers based in Britain could move their operations to the EU to avoid delays in components coming across the border.
By way of legislation, a 'No Deal' would mean that EU laws would be transferred so there are no loopholes or hazardous elements contained within British law. Britain would no longer have to follow the European Court Of Justice, but would have to adhere to the European Court Of Human Rights, who are a non-EU judicial body. There would be no annual £13 billion contribution to the EU's budget, but contrary to that, subsidies to people in the agricultural sector, that total £3 billion under the Common Agricultural Policy, could be lost. One of the main issues surrounds the Irish border, that is an absolute minefield to get your head around, but a hard border between the Republic and Northern Ireland could press for customs and immigration controls, unlike the current agreements.
However, if the 'No Deal' gets voted down this evening, we move to another vote on Thursday surrounding an extension of Article 50 under the EU's Lisbon Treaty. If MPs vote to extend Article 50, then Brexit is suspended and the government would get more time to try and negotiate a 'better deal'. The EU appear to be rather stubborn when it comes to negotiations and so, it is rather unlikely that they would be willing to renegotiate with Britain. In truth, the EU need Britain as much as we need them and so, it may be worth them reconsidering a negotiation period so it can work out as the best for both parties, not one way or the other.
An extension of Article 50 does not just allow for a potential renegotiation; it would also allow the UK to conjure up an alternative outcome, such as a General Election or possibly a 'People's Vote'. A General Election, personally speaking, seems a tad 'out-there' with regards to the fact that a change of personnel, perhaps to Labour and the premiership of Jeremy Corbyn, does not necessarily mean a 'better deal' for Britain; it would only draw out the process further and as mentioned previously, it is up in the air as to whether Michel Barnier and the EU negotiating team would even consider the chance for Britain to table another deal.
In the case of a 'People's Vote', we've talked about this before on a couple of occasions and whether it would be the best outcome remains to be seen. The talk of one has undoubtedly gained momentum over the past six months and it would perhaps be ill-considered to dismiss it straight away. It is inherently clear that the idea of a 'People's Vote' is a push for the Remain camp to get their long-awaited victory and what if this doesn't happen? That's another 24 weeks gone, according to experts, and we're back to where we started really. There's no doubt that the outcome of a 'People's Vote' would be close, but if Remain doesn't 'win' as such, what are the other options? May's Deal? 'No Deal', even? A 'People's Vote' is the people undoing the work of politicians undoing the work of the people. I would suggest it only as a last resort once all the other viable options are up and have been thoroughly considered.
In conclusion, to answer the question, there is no 'easy way out' from this Brexit mess and it is still an absolute minefield as to what we do next. The three votes this week will prove to be absolutely pivotal to this country's future and as we're already in domestic tatters, it's hard to see things getting any worse. Politicians are putting themselves before the people and in an age of economic and social uncertainty, we should all club together and use 'country before party' politics; the last time that was seen was during the Second World War when all parties clubbed together with the aim of defeating the Axis powers. It is needed again to drive this country forwards through the political hell that we're deeply embroiled in at the moment. So, in truth, what the hell next? A 'National Government', that's what's next.