Ian McConnell on Brexit: Tories will accept any price for hard departure – others will be paying: Opinion

While expressing his view that it would be “preferable” to have a future free trade agreement with the European Union, Mr Sunak declared it was “absolutely not” a question of doing “a deal at any price”.

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It was in many ways just a reiteration of tired old Tory rhetoric on Brexit. Does this arise from a genuinely held, though in reality way-over-inflated, view among UK Government ministers of the country’s importance on the global stage and negotiating power relative to the EU, the largest free trade bloc in the world? Or do the Tories know the actual score on this front and it is just politics and bluster? You would imagine they must surely know the reality of the situation but it remains difficult to tell.

Of course, in many ways the Chancellor’s remarks echo the posturing of former prime minister Theresa May about no deal being better than a bad deal. It remains difficult to understand such a viewpoint. Any agreement – even the narrow and unambitious one the Johnson Government is now trying for – looks better than the no-deal alternative.

Of course, the EU membership that has been discarded by the Tories was best of all for the UK. Retaining single-market membership was next best. These are the simple truths.

Bank of England Governor Andrew Bailey, addressing MPs on the Commons Treasury committee, said this week of a no-deal scenario: “The long-term effects, I think, would be larger than the long-term effects of Covid.”

He added: “It would be better to have a trade deal, yes, no question about it.”

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The economic forecasts from the May government spelled out a very high price for the UK of a no-deal scenario. These predictions remain entirely relevant. And you only have to take a look at the degree to which the business community is imploring the Conservative Government to do a deal to realise how much damage, inconvenience and chaos a no-deal departure will cause for companies.

It remains utterly lamentable the UK Government threw away even the possibility of the least-damaging Brexit outcome from early on, when Mrs May decided that the country would be leaving the European single market.

While Leavers were not asked what kind of Brexit they wanted in the 2016 vote, which sadly saw a very narrow victory for the Leave camp and its tall tales, the Tories decided the departure must be a hard one and that this was the “will of the people”. Of course, Scotland and the likes of London did not fall for the Brexiters’ fairy stories and voted very heavily to remain in the EU.

And this brings us back to Mr Sunak.

The Conservatives have been hell-bent on achieving what will, deal or no deal, be a hard Brexit at any price. However, they bang on about how they will not do a deal at any price.

So they are willing for any price to be paid for the former but not the latter. What they are buying with the former is an ideological (and very damaging) departure from the EU and single market. But the key thing here is that it is not the Tories who are leading us down this dark path who will be paying the price. It is millions of households and many, many businesses already laid low by the coronavirus pandemic. You would imagine most if not all of the Conservative Brexiters in the Cabinet are unlikely to bat an eyelid at the huge cost of a no-deal departure. They have certainly seemed at best utterly indifferent about avoiding such a chaotic exit and have in actual fact looked pretty obstructive as they have pandered to the British nationalist gallery, with talk of “sovereignty”, British waters and taking back control.

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And this Conservative Government’s talk about the “price” of a Brexit deal is absolute rubbish in any case. What a deal with the EU would do is mitigate the Brexit damage – an agreement delivers a benefit relative to a no-deal exit so in that sense it is wrong to look at it as having a cost.

That is to say the narrow trade agreement the Government is trying to negotiate will result in major economic damage to the UK relative to being in the single market, but will not be as expensive as a no-deal departure from the single market.

Whether or not such a deal is finalised remains up in the air. There has been talk in recent days of a Boris Johnson “intervention”. And last week European Commission President Ursula von der Leyen cited “better progress” in the talks in key areas such as state aid.

What remains crucial to remember though is that, even if the UK manages to secure the narrow trade deal it says it is trying to agree with the EU, the damage to the country’s economy from the Tory Brexit folly will still be very great.

If the UK concludes an average free trade agreement with the bloc, the hit to its gross domestic product relative to having stayed in the EU would on a 15-year time horizon be 6.7% on the scenario of zero net inflow of European Economic Area workers, according to the May administration’s 2018 forecasts. Even with no change to migration arrangements, GDP would if an average trade deal were agreed be 4.9% lower in 15 years’ time than if the UK had stayed in the EU. And this is now clearly an over-optimistic scenario given the Tory clampdown on immigration from the EU which has been the subject of legislation and of celebration by the likes of Home Secretary Priti Patel.

The 2018 forecasts show, even if there were no change to migration arrangements, UK GDP on a 15-year time horizon under a no-deal scenario would be 7.7% lower than if the country had stayed in the EU.

On the basis there is zero net inflow of workers from EEA countries, the forecasts from the May government have it that UK GDP in 15 years’ time would in a no-deal exit be around 9.3% lower than in a scenario in which the country had remained in the EU.

It has been increasingly evident that the Conservatives are willing for households and businesses to pay any price for their ideological Brexit.

The UK has of course, like countries around the world, been laid low by the coronavirus pandemic.

However, the Johnson administration has refused to countenance any delay, let alone the necessary total re-think, of its ideological Brexit drive, even though it is plain for all to see that, deal or no deal, this will heap further misery on struggling households and businesses.

The increasing frustration of businesses over the practicalities for them of Brexit, on crucial matters such as the movement of food between Great Britain and Northern Ireland, is easy to understand. Especially when the UK Government is hectoring them to prepare. How can you prepare for something if you do not know what it is?

The Johnson Government had until July 1 to extend the transition period, which has kept the UK in the European single market and saved it from the actual effects of the technical Brexit celebrated by Johnson and co. on January 31.

Remarkably, even given the track record of this hidebound, Brexit-obsessed Government, the ruling Tories have refused to as much as postpone the damage. Even amid the coronavirus crisis. So the transition period will end on December 31.

Mr Sunak, as he talked about not paying “any price” for a deal, declared: “We will prosper in any eventuality.”

Presumably he is referring to the country rather than the Cabinet.

Why, oh why, does this Government continue to tell a story that is totally at odds with the economic forecasts drawn up by the Conservatives themselves under the May administration? And of course at odds with reality generally.

How on earth will the UK prosper from a huge further hit to economic output arising from loss of free movement of workers between the UK and EU, the Conservatives’ ideological clampdown on immigration and the end of frictionless trade with the world’s largest free trade bloc? Tell us that Mr Sunak.