OECD chief Jose Angel Gurría is so chillaxed about a no-deal Brexit. Telling Sky’s Ed Conway in Davos, “What’s the worst scenario? A no deal, WTO rules…the whole world is running by WTO rules these days!”
— Henry Newman (@HenryNewman) October 13, 2017
“There is nothing in the WTO about regulation,” Miriam Durantez said on the Daily Politics earlier. Which is a slightly curious comment given she wrote a book on WTO regulation called “Regulatory Aspects of the WTO Telecoms Agreements”. To be fair, sounds forgettable.
— Sky News (@SkyNews) March 15, 2017
Speaking to the Brexit select committee this morning, David Davis has dismissed John Major’s claim that no deal is the worst possible outcome. He made clear the government’s position is that no deal is “not as good an outcome as a free trade, friction-free, open agreement”, though insisted it would not mean a hard border with Ireland and offered this sensible assessment of a WTO Brexit:
“It’s not as frightening as some people think but it’s not as simple as some people think. In the event that we don’t get [a deal] we will have a fairly extensive contingency plan which is already underway. And we will have, whatever happens, a sharply improved access to the rest of the world off the back of a large number of free trade agreements which will be coming into effect shortly after we leave… [No deal] is by no means the worst possible outcome. By no means.”
As Guido reported on Monday, this is the argument senior Leavers want the government to make a bit more forcefully. You can’t go into a negotiation if you aren’t prepared to walk away.
Sir Keir Starmer, the Guardian et al are jumping on Davis saying no economic assessment of a WTO Brexit has yet been carried out. This is a bit of a red herring, they have repeatedly said planning is underway and Davis says they will have an assessment in a year’s time.
Senior Leave figures want the government to do much more to publicly prepare the public for a Brexit on WTO terms. Theresa May’s speech in January arguing that “no deal is better than a bad deal” pleased Tory Leavers, but they fear not enough has been done by Downing Street to prevent continuity Remainers seizing the narrative and convincing the public that WTO terms would be a disaster. This is why over the weekend Boris Johnson, David Davis and Liam Fox all came out and made encouraging noises about the possibility of no deal.
There are three reasons why Leavers want Number 10 to do more to make the WTO case. First, the chances of a Brexit along WTO lines are much higher than the government publicly admits. While the official line is that no deal is “unlikely“, behind the scenes senior figures in Number 10 have said they put the probability at around 30%. Most Leavers think this figure is optimistic. Another government source tells Guido they believe the likelihood of a WTO Brexit is 50-50.
Second, demonstrating that WTO terms are acceptable is vital for the negotiation. If Brussels believes Britain thinks WTO rules are a disaster, the threat to walk away is not credible. Going into the negotiation without being happy to accept WTO terms is obviously the worst possible negotiating hand. A Whitehall source says: “People are being told that WTO rules would be the end of the world. We need to explain to them why it isn’t”.
Third, Leavers want to learn the lesson from Cameron’s failure to make any contingency planning for Brexit. This is seen by the government as Cameron’s worst betrayal – Leavers are determined not to repeat the mistake. This means proper preparations for a WTO Brexit, both in terms of contingency planning in Whitehall and preparing the public for that outcome. Matt Ridley’s piece in today’s Times is the sort of narrative Number 10 should be pursuing…