How likely is a no deal Brexit?

With the Brexit deadline looming, a lot of people fear a “no deal” dystopia. Things are not as bad as they look.

We’re in month 17 of 24 of Britain’s EU exit negotiations and we still have no clue what outcome to expect.

Maddening, isn’t it?

At least one group’s uncertain fate has become known while parliament’s out gallivanting.

Leaked documents show the government is going to guarantee EU citizens’ rights in the UK even if it doesn’t reach a deal with the EU.

The government says it’s taking a “moral high ground”.

It also admits it’s the only way to avoid labour shortages in healthcare, social care, construction, and tourism.

But mostly it’s doing this for the moral high ground reason.

Meanwhile Bloomberg has become so bored now over summer recess that it’s come up with a Brexit simulation game, which lets you decide the fate of the British nation.

Think tank Institute for Government ran its own simulations and came up with five scenarios for the next phase of Brexit.

Four of them end in the much feared “no deal” dystopia, but the situation is not as bad as it may seem.

Not as bad as it looks

Most of the scenarios the Institute for Government lays out end in “no deal”.

Only one of its five possible outcomes leads to, what it calls, an “orderly exit”, which implies all other scenarios result in chaos.

Not strange, then, that business leaders and Bank of England governor Mark Carney are alarmed…

Now just because the IfG sees four out of five roads leading to a “no deal” Brexit doesn’t mean the chance of no deal is 80%.

Not all scenarios are equally likely. In fact, I think the chances of “no deal” are overblown.

In the first three scenarios Theresa May reaches an agreement with the EU over the UK’s withdrawal. That’s still the outcome we should expect from the ongoing Brexit talks.

The government has moved away from its “no deal is better than a bad deal” stance. It wants a deal with the EU, and the EU wants a deal with the UK.

Parliament then gets to vote on that agreement, which it can either accept or reject.

A majority in parliament never wanted Brexit. The last thing these MPs want is for the UK to break with the EU cold turkey.

For political reasons (I’ll get to that in a moment), it’s still possible that parliament will reject the government’s deal with the EU.

But the situation where parliament rejects the withdrawal agreement and simply accepts a no deal Brexit is unrealistic.

Parliament wants a deal. If May doesn’t get it right the first time, she’ll be sent back to the negotiation table.

Brussels will then make concessions it previously said weren’t possible, and voila the deal passes on the second try.

So we can cross off scenario 2. Scenario 3, where the EU refuses to renegotiate, we can forget about too. Like the UK, the EU has nothing to gain from a chaotic no deal Brexit.

Either the withdrawal agreement creeps through the Commons the first time (scenario 1) or it passes the second time.

I can be brief about scenarios 4 and 5 (= no deal with the EU): they won’t happen.

Theresa May has shown her willingness to reach an agreement that keeps the UK close to the EU after Brexit.

It’s the outcome the EU also favours the most – apart from no Brexit at all.

If May needs more time, she’ll get more time, because a no deal situation is in neither side’s interest. In politics that means it won’t happen.

The biggest threat to a no deal exit from the EU won’t come from Brussels; it’ll come from parliament.

Purists and pragmatists

“The risks of either a deliberate or an accidental no deal are quite high,” the authors of the IfG paper write.

People are growing nervous because votes on Brexit in parliament have become harder to predict.

Politics used to be a lot simpler. You counted the number of blue ties and red ties in parliament and you had a pretty good idea which way a vote would go.

Brexit has changed all that.

It’s given every politician an extra identity as either a Leaver or a Remainer. Both Tory and Labour politicians have defied the party whip on Brexit on multiple occasions.

What complicates things further is that Leave and Remain are no homogeneous groups either. Both can be divided into purists and pragmatists.

Purists and pragmatists on both sides seem to have found each other, which has led to two new tribes.

Therese Raphael describes them in Bloomberg. In the red corner, the pragmatists…

“There are many Leavers who don’t like May’s proposed deal, but who would still favour an agreement of some kind because they think Parliament might reject a no-deal result, throwing Brexit itself into doubt. Then there are Remainers who don’t like May’s proposal but who would support it as preferable to the cost and chaos of no deal at all.”

And in the blue corner, the purists…

Against that possible coalition of the disgruntled-but-willing is a potentially stronger force: Remainers who oppose May’s deal because they find it too great a compromise and hope that they can cancel Brexit altogether; and Leavers like Rees-Mogg who oppose it as a sell-out.”

Even so, I predict that Theresa May will get her way in the end with parliament approving the withdrawal agreement.

Brexit purists like Boris Johnson and Jacob Rees-Mogg will keep on making headlines as they warn that May’s proposal would make the UK an “EU colony” or a “vassal state”.

But the truth of the matter is that the pragmatists outnumber the purists in parliament. Most MPs want close future ties with the EU and approving the withdrawal agreement would secure that future.

Meantime the government’s already laying the groundwork for public approval of a Brexit deal with the EU. Brexit Secretary Dominic Raab has warned a no deal Brexit would lead to higher prices and burden pensioners.

Expect more warnings about how dreadful “No Deal” would be in the months to come as the government tries to rally the British public behind Theresa May’s Brexit.

If you don’t like where things are headed, Bloomberg’s simulation game at least lets you decide your own Brexit.

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