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Beyond the Slogan: Why ‘No Deal’ Really is Better Than a ‘Bad Deal’

Conrad Lewandowski (University of Warwick)

Deal or no deal? If you hadn’t been paying attention, you’d be forgiven for thinking that Britain was involved in a Noel Edmonds game show rather than some of the most important negotiations in decades. Britain began Brexit negotiations in June, however in the months since the talks have seemingly stalled, with chief EU negotiator Michel Barnier referring to the progress of negotiations as a “deadlock” situation. This state of affairs has meant the idea of leaving the EU without a deal is an increasing possibility. A recent Sky News poll showed 74% of people agreeing that “no deal is better than a bad deal”, including 75% of under 35’s. But what would this actually mean for the UK?  

Jeremy Corbyn has drawn a dividing line with the government by saying that if he was PM, he would ditch the idea of no deal. However, the idea that we should accept whatever deal is offered us is counterproductive and would not be in the best interests of the UK. A negotiating stance without a credible threat to walk away would mean the EU would hold all the power, and would be even more likely to offer up a bad deal. This situation would be similar to David Cameron’s attempt to renegotiate Britain’s EU membership early last year, which lead to no meaningful reforms of the EU migration system. Cameron showed no real signs of being willing to campaign for a Leave vote, weakening his stance and giving the EU no motivation to compromise. The same could occur if May were to copy Corbyn’s strategy and would almost certainly lead to a deal which would be bad for Britain. A bad Brexit deal could entail:

- A divorce bill of over £100bn (greater than the annual education budget)

- Further payments into the EU budget, possibly indefinitely

- A drawn-out “transition period” within the single market of over 5 years, causing a long period of uncertainty for businesses

- Continued loss of sovereignty, for example having to accept rulings from the European Court of Justice that British courts and elected officials would have no power to influence or change 

That all sounds terrible, but would no deal be any better? I would argue that it would, for two main reasons. Firstly, it would allow for Britain to change its laws in order to make life easier for small businesses. Only 6% of businesses have any trade at all with the EU, yet 100% have to abide by EU rules and regulations. The vast majority of businesses would welcome this relief. Businesses that trade with emerging markets and the Commonwealth allies we abandoned in the 1970s when we first joined the Common Market could see their business increase as new trade deals around the world are signed. While it is true that prices of EU produce would increase due to WTO tariffs, we could eliminate and reduce tariffs on the rest of the world as we take back control of our trade policy. Secondly, leaving with no deal would mean not only would we not have to pay the EU a £100bn divorce bill, but we would also no longer have to make yearly net contributions of £20bn into the EU budget. This would allow for us to decide for ourselves how to spend that money – whether it’s on the NHS, schools or any number of priorities. 

Of course, no deal is not a utopia. Brexit with a deal that works in the interests of future trade and a friendly partnership should continue to be the goal of the government’s negotiating team. However, if push comes to shove, the government should make it clear that they are willing to walk away.

 

© Picture: wikimedia

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