It’s May's Deal or No Deal

There is no reasonable alternative to Theresa May’s Brexit deal. That is the elephant in the room which all sides have to acknowledge, even though some on the Leave side will find it painful.

Many of the issues that May has highlighted in her defence of the deal in Parliament are still highly relevant on a geopolitical and macroeconomic level. Take Northern Ireland. An important issue pertaining to the territorial integrity, and very possibly the peace and stability of the UK itself was simply ignored by the Brexiteers during the course of the referendum. The crux of the issue is the ‘backstop’ for Northern Ireland which simply means that it will stay in the EU customs union in some form, something which is bitterly opposed by Tory Brexiteers and the DUP. They fear such an arrangement would lead to a two tier customs and regulatory approach with the British Isles split between a Great Britain leaving or preparing to leave the EU customs union and a Northern Ireland that is in sync with it. Effectively that would lead to the end of the United Kingdom.

It is true that May’s deal expands the backstop to a UK wide one, however that is a temporary arrangement and the British state has the option of leaving the customs union fully at the end of the transition period. The Prime Minister’s argument that British territorial integrity is paramount is the correct approach. Anything else risks peace and stability as the now vulnerable Good Friday Agreement could collapse under the weight of the pressure of Brexit. That would obviously not be good for Britain from a security viewpoint, as it already faces a significant threat from terrorism originating in the MENA and South Asian regions. The last thing the UK need now is a major flare up in Northern Ireland as well.

Other economic considerations will now also come into play. The most important strategic issue is that of jobs and economic stability. That is protected by temporary access to the common market and customs union until alternative trading arrangements can be sorted out between London and Brussels. The option of leaving the customs union at the end of the transition period in 2021 is there, although that depends on the goodwill of the EU in doing so. The stark reality is that no one power can dictate the terms of a bilateral relationship, no matter how strong it is. Britain today is no longer a global superpower.  It was never realistic to expect the EU to have no say on the critical issue of customs union membership. Hyperbolic and hysterical assertions in some quarters about Britain being enslaved or colonised by the EU are not helpful, and show a fundamental disconnect rom reality.

Whether driven by personal ambition or fear of having to take responsibility for Brexit, the most hardcore Brexiteers are coming ever closer to pushing Britain off an economic cliff edge for little or no gain. Already the pound is falling. It is likely that threats of further deterioration in the British economic environment and warnings from business about the risks of no-deal will play a major role in what happens next. It is also likely that much of this will be ignored by many who are effectively arguing for a ‘No Deal’ Brexit but appear not to have the courage to say so publicly. Perhaps something that will give them food for thought is the real spectre of a Jeremy Corbyn Premiership, which has long been seen by the markets as something of a nightmare scenario. Corbyn is no social democrat.

It is that ultimate fear – of putting the hard Left into 10 Downing Street- that may save Theresa May’s job and possibly get her deal through Parliament. The alternative is economic chaos with serious repercussions for the credibility of the Tory Party itself. With months to go until Brexit, the clock is ticking.