Tag Archives: No Deal

Planning for a “No Deal” Brexit remains sensible!

Newspaper reports have suggested Brexit Secretary David Davis has ordered officials to step up preparations for the possibility of a failure to strike a deal with the EU which Davis would then present to the Cabinet. Labour has reiterated they will not accept a “no-deal” Brexit and that claims the UK could walk away from the EU without a deal are “irresponsible.”

However, surely this is simply sensible planning from the Government? Firstly, as a negotiating party there is a duty to prepare for all outcomes. A “No-Deal” Brexit appears to be gaining traction. (JP Morgan claims the chance of this occurring now sit at 25%.) Secondly, most would argue that to be taken seriously in any negotiation you have to show you are willing to walk away.¬†Failing to do this provides the opposing side with a distinct advantage.

Crucially, though, and this point must be made clear, preparing for a “No-Deal” Brexit does not mean this is a desirable outcome. The call from Brexit pressure group Leave means Leave for Theresa May to walk away from negotiations should EU leaders refuse to start trade talks is irresponsible and dangerous. A “No-Deal” Brexit is not ideal for the country. It fails to provide economic and security agreements and provides no level of certainty. It would also be a significant negotiating failure which would have clear political consequences. So, yes it should be prepared for, but not sought for.

The reality is these negotiations are at an early stage. There is a lot to happen yet. Given that no country has tried to do what we are doing, it is clear this was going to be complex. The idea there wouldn’t be complications or disagreements along the way was simply ludicrous. Clearly, the mood music is not great at present. This does not mean that we should despair.

It is palpably in both sides interests to strike a deal. A “No-Deal” scenario hurts both the EU and the UK (yes it would hurt the UK more than the EU, but the EU will want to avoid unnecessary damage!) That is why it is likely both sides will reach an agreement at some stage. But, until that deal is agreed then the Government and the UK must have a back-up plan. And hopefully that is all this is and will be.