The prospects of a trade deal between the UK and the EU are looking increasingly remote. After the PM travelled to Brussels on Wednesday evening for last-ditch talks with the European Commission President, former German Defence Minister Ursula von der Leyen, both sides have remained equally unwilling to concede.
However, I believe this is a dangerous path to tread, for the Prime Minister and the whole nation alike.
First and foremost, the lack of a trade deal being reached is likely to have significant economic ramifications. The GDP is predicted to reach pre-pandemic size at the end of 2022 under a deal scenario – which quickly becomes the end of 2023 with a no-deal outcome. With 49% of our trade being with the EU, tariff introduction will have a significant impact on businesses, which are already teetering on the brink due to COVID-19 restrictions. For many, this may be the straw that breaks the camel’s back – indeed, the ONS predicts unemployment rising to 7.5% by mid-next year under the best case scenario, or up to 8.5% in the event of a no-deal Brexit. This represents tens of thousands of workers, many of whom are in the so-called ‘Red Wall’ won last year by the Tories, who had been promised economic security.
A no-deal situation would also have tariffs (possibly 80% on some meats, and 40% on vegetables) pushing up food prices by at least 1.5% – a pressure that, especially in areas with strict coronavirus restrictions in the past few months, could mean very damaging consequences for working families.
This impact is reflected on public opinion, which is strongly in favour of reaching a deal. Latest YouGov polling indicated that 50% of the British public would consider no-deal a ‘bad outcome’, compared to only 26% who would opt for it.
Although elements of the public opinion will be swayed by Johnson’s “Australian-style rules” rhetoric – a completely misleading one – and the nationalist pursuit that is fishing, the impact a no-deal situation it will have on ordinary people in the long run will speak for itself, and may even contribute to a Conservative defeat in the next election.
The majority of the public are, generally speaking, also in support of free trade, having seen the detrimental impact of President Trump’s trade war with China over the last couple of years, and will therefore demand reassurance that the situation will not replicate itself with Britain and the EU. This proof is, however, likely to be jeopardised by the logistical nightmare that a no-deal Brexit will pose in January 2021, for example regarding traffic jams on the M20 through Kent.
Additionally, less general consensus will give free ammunition to independence movements across the country, particularly in Scotland, where the SNP are looking dominant going into next year’s Scottish Parliament elections. By this time, when other mayoral and local elections are taking place, the economic impact of a no-deal outcome will be becoming apparent, potentially leading to large losses for the Conservatives.
With these unfavourable statistics, it might be worth considering why the PM is even erring towards no-deal. Simply, Boris Johnson is under pressure from his party’s vocal pro-no-deal wing – the same group of MPs dubbed the ‘awkward squad’ when they failed to back former PM Theresa May’s Withdrawal Agreement last year. These MPs support a no-deal outcome as an opportunity for deregulation of the economy (an incredibly unpopular decision), improving productivity and offsetting the costs of potential EU tariffs – arguing that new trade deals with other nations would more than offset these costs. However, this argument doesn’t hold water considering that US President-elect Joe Biden, soon ruling our next largest trading partner, has ruled out trade deals as a priority, vowing to prioritise his own country.
I believe that, even though Johnson’s no-deal gamble will present itself as a short term success, with his own party easing the pressure on him to stand up to the EU, elements of the public approving of his strong stances on issues such as fishing, it will have severe long-term consequences. The likely-bodged no-deal transition in January will lead to extended bad press for the government, and place the PM’s already tumultuous premiership under even greater pressure.
And, if there is one thing we know, is that a weak and unpopular government will, surely, do no favours to the nation as we attempt to navigate the next stages of the pandemic.