Threat of no-deal Brexit has been banished

We have achieved “something that the people of this country instinctively knew was doable but which they were told was impossible”, claimed Boris Johnson when the EU trade deal was finally announced. He was entitled to claim credit for delivering what the narrow majority of the British electorate voted for four and a half years ago. He has seen off the worst Brexit scenario and confounded the pessimists.

The spectre of “no deal” no longer haunts British politics. It was one of the realities of Brexit that the country leaving the EU was in a weak bargaining position, and that one of the few credible threats it could use — to walk away without agreeing terms — would be more damaging to it than to the union it was leaving.

Ursula von der Leyen, the EU Commission president, set out bluntly the reasons for the EU’s “strong negotiating position” at her news conference this afternoon: “A hard Brexit would not have been good for both sides, but it would have hit the UK harder.”  

That was why Theresa May was mocked for saying “no deal is better than a bad deal”. Both sides knew she didn’t mean it. She was desperate to avoid a no-deal exit, and was in any case bound by a parliament that wouldn’t allow it. But neither would that parliament agree to her withdrawal agreement, which would have solved the Irish border problem by keeping the whole of the UK in the EU customs union. Boris Johnson didn’t change May’s withdrawal agreement much. He kept the financial settlement — no one can remember the details now but we will pay £24bn to the EU over the next 44 years — and dropped the customs union. More importantly, though, he managed to change parliament, by holding and winning an election, and completed stage one of Brexit by ending our EU membership at the beginning of this year.

That postponed the rigours of a possible no-deal outcome to the second stage of negotiations. Johnson was better than May at pretending to be willing to leave without a deal. The EU side in the talks thought he was bluffing but they could never be absolutely sure. Remainers did much of Johnson’s work for him, warning against ending the transition period without a deal, and wailing and rending their garments over the horrors of tariffs.

Several other things combined to give Johnson more bargaining power than might have been expected. One was Ireland. During the first stage of Brexit — negotiating the withdrawal agreement — much was made of EU solidarity with Ireland and its insistence on keeping an open border with Northern Ireland. But as Ireland would suffer from a no-deal outcome as badly as the UK, and worse than any other EU member, the protestations of solidarity became complicated. Irish leaders insisted on solidarity in public, even if it meant no deal; but in private they had a strong interest in compromise. As the true deadline of 1 January came closer, the balance of power also shifted because the EU side had to satisfy 27 leaders, plus the European Parliament, whereas the UK had a single decision-maker in Johnson. This imbalance helped the EU side early in the negotiations, because any shift in its position would have to be agreed by all parties. But as deadlines came and went, it was the EU that became nervous. Whereas Johnson had engineered a situation in which the British could ratify a deal at the stroke of his pen, the EU side had to obtain 27 signatures and to organise a vote in the European Parliament.

In the end, the Conservative Eurosceptic hardliners — the ones who really would prefer a no-deal exit — are powerless. They may be able to cause trouble for Johnson in future, but they cannot stop the deal. If they don’t like it, they can vote against the legislation to enact it in British law that will be rushed through the UK parliament next week, but they cannot stop the trade treaty itself being signed by the government — and the legislation will pass in any case because Keir Starmer will ask Labour MPs to vote for it.

The prime minister came close in his news conference to claiming that he had successfully negotiated access to the EU single market and the ability to negotiate free trade deals around the world. He nearly said we could have our cake and eat it. “I’m not going to claim that this is a cakeist treaty,” he said, realising that it wouldn’t be tactful on a day when both sides were supposed to pay tribute to each other. But it wouldn’t be true, either, because the deal does carry a long-term economic cost to the UK.

The most important thing about the deal, in fact, is that the threat of not doing a deal has been lifted. That ought to come as a relief to everyone, except a handful of the most anti-EU Tory MPs and possibly an equal and opposite handful of the most pro-EU MPs, because it means no further disruption and cost to imports and exports — no additional burdens, that is, on top of those imposed by coronavirus restrictions.

Of course, there will still be a long-term economic cost to leaving the EU. There will be checks that weren’t required before on goods going between the EU and UK, however “light touch” they are. The friction on trade will make us poorer than we otherwise would be, even if we won’t notice any dramatic change in nine days’ time.

So we should be pleased that, despite threatening to break international law by tearing up recent treaty obligations, Johnson remains on speaking terms with EU leaders. We will need a good working relationship with our largest trading partners, and, now that the threat of a no-deal Brexit has been banished, we ought to be relieved that things are not worse.