What happens if refusing to acknowledge the economic costs of Brexit is actually the UK Government’s tactic?

I’ve long been fascinated by how the pro-Brexit campaign’s lack of a plan for Brexit, prior to the 2016, actually helped the Leave side win that referendum. It gave Leave a sort of slippery quality in campaigning terms. “Oh no one is talking about putting up trade barriers!” Gove would say one minute, while Farage could simultaneously equally plausibly talk of ending freedom of movement. Brexit was, during the campaign, all that each of its proponents wanted it to be.

Liberal leaver (i.e. free market, but pro-immigration) – sign here!
Control immigration and protect traditional industries – count me in!
Return power to Westminster – sure, let’s do it!

That all made sense to win a campaign. But as a means to actually do Brexit it was pretty useless. The inherent trade-off remained untouched – soft Brexit is better economically, less good politically, while a harder Brexit is better politically, but less good economically.

Theresa May at a stroke positioned the UK towards the harder end of the spectrum, having promised to end Freedom of Movement (such was her ideological wish), and Johnson’s deal was an adaption of that.

But that leaves a slew of issues still unanswered.

Here are a few for starters.

Will the UK seek equivalence with the EU’s Data Protection regime? We do not know. Will UK car manufacturers need a separate car type approval, in addition to the EU one? Javid hinted they would, but we still have no definitive answer, and he’s now out of a job. What about the airline safety regime? Depends on whether the UK can free itself from the “shackles” of the European Court of Justice.

In each case the economically pragmatic route is obvious: seek equivalence on data protection, sort out mutual recognition on both car type approvals and the airline safety regime, and if necessary tolerate a role for the European Court of Justice in all three. Likewise in each case the “Take Back (Political) Control” route is obvious – UK does its own thing and diverges in all three cases.

But somewhere between these extremes there must be a line.

Some point where the loss of jobs of a car plant closing is higher than the sovereignty gained from being able to diverge on the cycle used to test exhaust emissions. Or where the extra cost of a separate data protection regime, and the associated economic hit, is higher than being willing to tolerate equivalence under GDPR.

My assumption was that by now, with the referendum done, the 2019 election won for Johnson with a fat majority, and almost five years until the next election, compromises would start to be struck one after the other. Data protection? It’s too expensive, so there we align. Car type approvals? The economic cost is limited, so there we diverge. And so on and so on across dozens of sectors and industries. A look into the books about negotiation tactics would largely confirm this – once the headline goals of both sides are clear in an international negotiation, the working level teams on both sides then proceed to plough through mountains of detail.

But after some meetings with political insiders in London a few weeks back, and some further reading since, I am starting to wonder if I am wrong. For the politicians and advisers in the UK Government to acknowledge that this point exists, the line where economic pragmatism wins out over the ideological purity of the “Take Back Control” cause, is to acknowledge weakness.

Better instead to pursue the ideologically pure line. To win the communication battle. To lay the blame for problems in respective sectors with those sectors themselves. They, after all, are the ones preventing the UK from Taking Back Control. And if that means the UK is staring No Deal in the face later in the year, that – the UK newspapers will bellow – is because of a lack of flexibility on the EU side, not because the UK government has hitched itself too strongly to its ideological mast.

Putting it all another way: I’d assumed the lack of seriousness from the UK Government with regard to the next stage of Brexit until now was due to a lack of skilled staff and preparedness. I am now beginning to think it is actually a strategy. Try to look strong in the face of the EU juggernaut, rather than face up to the compromises inherent in Brexit. It’s going to be a very bumpy few months.

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