If we rule out No Deal, we’re likely to regret it

Ruling out No Deal would weaken our negotiating hand and likely damage our long-term prospects as a country, argues Labour Leave founder John Mills.

Jeremy Corbyn is sadly refusing to countenance a No-Deal Brexit and a move on to WTO terms. This is surely a mistake because calls to rule out No Deal could land us with one of the other ways ahead currently being canvassed, any one of which could turn out to be much worse than No Deal.

The Prime Minister's proposals offer us a dim future in terms of trade, the economy or our sovereignty. They would increase uncertainty and tie us closely to the laws of the EU. They would involve us in handing over £39 billion without our knowing what we are going to get back in return, and lock us into the Irish backstop. Theresa May's Withdrawal Agreement would also severely hamper our ability to do the international trade deals we need. 

The other options on the table are no better. A second referendum would be seen as a betrayal by large swathes of the electorate and is fraught with difficulty. Which questions should be asked? Is there enough time, given we would need to keep extending Article 50 over and again? How much money will it cost? Will businesses embrace the idea, given that it continues the interminable uncertainty? Are its proponents so sure that we won't end up with the same answer as last time?

The idea of a Norway-style EEA option is dependent on the support and approval of existing EFTA members, which may not be forthcoming. It would mean accepting freedom of movement, something which is unlikely to satisfy the vast majority of Leave voters, and it would mean locking ourselves into a law-taking subservience from which we are likely to find it very difficult to escape. 

Many are keen to revoke Article 50, or extend it. This may turn out to be unavoidable but it is difficult to see how postponing Brexit decisions is going to make it any easier to see the way forward. In addition, extending Article 50 is likely to be seen as breaking faith by the majority of voters who voted to leave the EU. All political parties committed themselves to Brexit after the referendum and delaying – let alone revoking – Article 50 now would inevitably be seen as a betrayal. 

The problem we face today is that the majority of MPs now want us to stay in some form of Single Market and Customs Union, but at the same time retain other parts of Brexit such as no freedom of movement. The EU27, understandably, think this is cherry-picking, and want to avoid compromising the integrity and security of their key institutions. We are unlikely to persuade them otherwise. 
We are now faced with a stark choice. A very messy, unsatisfactory half-Brexit; one which gives no one what they want and may in fact be much worse for our economy, trade prospects and sovereignty than remaining in the EU. Alternatively we could opt to reverse our strategy and work towards a free trade deal along Canada+++ lines. This is the outcome that is most obviously likely to be the way forward if we do exit the EU on a No Deal basis. 

Time, however, is not now on our side. Mistakes were made right from the start, notably that we allowed the EU to defer trade talks. This has meant that we have spent two and a half years discussing everything except the most vital element of all: how we trade with the EU and internationally in the future. This has caused huge uncertainty for business and mounting anger and frustration for the public. 

Unfortunately, emotions are riding so high that few people seem to have tried to make honest and realistic assessments as to how disruptive and costly a No-Deal Brexit really would be, or the benefits it would bring to the country. The knee-jerk reaction continues to be to dismiss the idea without any balanced consideration. 

Stepping back and looking at No Deal as an option, the most careful analysis suggests the short-term cost to annual UK GDP would be about 0.5 per cent, which – while not negligible – is not catastrophic, and which longer-term benefits could easily cancel out. A No-Deal Brexit may well not only turn out to be a better immediate way ahead than the other options but also one that would focus the minds of the EU27 on agreeing a swift and mutually beneficial trade deal with the UK. 
This is why ruling out No Deal is a mistake, not just for the Tory party but for Labour too, and Theresa May is right not to fall into this particular trap. Ruling out No Deal weakens our hand in negotiations, whether that be changes to the current Withdrawal Agreement or No Deal Canada+++. 

A managed No Deal – although we have certainly not chosen the best way of getting there – could yet pave the way for the UK to having a free trade deal with the EU, outside both the Single Market and the Customs Union. This would honour the result of the referendum, and give us the international trade opportunities we need. If we rule out No Deal in present circumstances, we may later bitterly regret having done so.