‘No deal’ spending isn’t a complete waste of money, Mr Hammond

Chris Giles, FlipchartRick and others have explained why Philip Hammond is reluctant to spend money on trying to mitigate the economic costs of failing to agree any kind of deal by the time the A50 notice period expires in March 2019.

In a nutshell, the argument is that the systems and infrastructure needed won’t be even nearly complete by that date, and half-finished preparations will not make a dent in the costs of not having a deal.

No piece of Brexitology is complete without an analogy:  if you haven’t got enough time to complete cooking your omelette, there is no point in breaking the eggs in the first place.

Chris further pointed out that architecture set up on our side of our borders can’t work unilaterally, and requires requited spending and commitment by those on the other side – our trading partners.

Pretty much everyone but the most extreme Brexiteers have accepted that there needs to be a transition period governing our relations with the EU as a prelude to settling our final status.  It seems that currently the government are minded to try to negotiate a 2 year transition.  It’s moot whether this will be granted by the EU27, because it’s moot whether the UK would accept that transition has to replicate the obligations as well as the full benefits of membership.

But even supposing a 2 year transition could be agreed, it is quite optimistic to think that in that time a final status agreement could be reached.  Even if there was agreement about the broad outlines of that deal, thrashing out its details, and the ramifications of exit for relations with 3rd parties, could easily take longer than 2 years.  Moreover, it seems highly likely that UK politics will dwell further in its current state:  one in which the different factions of Leave and Remainers resigned to Brexit cannot agree what final status we should try to seek.

So while we are now focused on the possibility that we may have ‘no deal’ by March 2019, it’s entirely possible we might get a transition deal, but face a serious prospect of ‘no final status deal’ in March 2021.

2021 may well be far enough ahead for some of that ‘no deal’ preparation to complete and be put to use.   And it’s not inconceivable that our EU partners might find it expedient to try to make it work, and to commit their own money to doing that.

 

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