We have all been cornered into a no-deal Brexit that will harm millions

Simon Wren-Lewis
Photograph: James Veysey/Rex/Shutterstock

In the months after the 2016 referendum, there was a chance of finding a Brexit deal that parliament could have voted for. Both major parties wanted to respect the result. Many remain voters were prepared to back Brexit. But it required Theresa May to negotiate with the opposition to find a soft Brexit deal both leaders could support.

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The moment May took a different course, she was doomed to fail. EU support for Ireland’s position on the border meant the government could not get the UK-wide free trade agreement Brexiter MPs wanted. A significant number in May’s own party then decided only no deal would be acceptable. From that point on, it would be impossible to get any kind of Brexit deal through either the current parliament or the country in a second referendum.

The reason is simple. A combination of remainers and Brexiters would block any Brexit deal in parliament, and outvote it in a referendum. Game theory calls it a blocking coalition. People talk about a growing polarisation of views about Brexit, but its roots lie in this blocking majority against any form of deal. Once Brexiters realised that ensuring no hard border in Ireland entailed a customs union, the chance of any Brexit deal vanished in this parliament.

But Brexit was to be revived. The European elections provided its proponents with new hope. The Conservatives’ terrible performance led to May’s replacement by Johnson, who said he was prepared for a no-deal exit. More importantly, the failure of the Labour leadership to see how things had changed since 2016 allowed for a Liberal Democrat revival and a split in the remain vote.

The tragedy of Labour’s stance was that the impossibility of any deal winning in the country also applied to anything a Labour government could negotiate. Remainers would vote against a soft Brexit, and Brexiters would ensure many leavers would not vote for it. The painful reluctance of the Labour leadership to give up the idea of a soft Brexit, a reluctance that split the remain vote, was entirely futile because Labour’s soft Brexit can never happen.

The implications of a split remain vote for Brexiters was obvious. If parliament was to block their plans, they had an opportunity to change its composition in a general election. Johnson’s attempt to get a deal is a charade simply designed to win an election and blame both the EU and parliament for any extension beyond October.

‘When John Major and Tony Blair said Brexit would damage the Good Friday agreement, leavers said, accused them of project fear.’ Photograph: Jeff J Mitchell/AFP/Getty Images

If Johnson wins that election, Brexiters will have saved Brexit from the jaws of defeat to achieve complete victory. What started as a referendum where there was a slim majority for some type of Brexit deal is likely to end with no deal supported by a minority being imposed on the majority. But it is worse than that: the sizable minority who say they want no deal have little idea of what they are voting for.

The economic consequences of a no-deal Brexit are well rehearsed. The media focus on the short-term consequences, but what academics of trade economics are confident about is the large and negative long-term impact. Almost everyone’s income will be lower by a number of percentage points compared with remaining in the EU. The more human face of that will include farmers, who will go bankrupt in their thousands or be kept afloat with borrowed government money. But the economic damage is only half the story.

The potential breakdown of peace in Northern Ireland caused by a hard border would be catastrophic. The UK will also have to deal with attempts by Scotland to achieve independence. Brexit will lead to endless negotiations with the EU as UK politicians are forced to make compromises they refuse to make today. The same politicians, meanwhile, will be so desperate to do a trade deal with the US that UK food safety standards will be compromised and the NHS made more attractive to US companies. And so on.

“Project fear”? Let’s look at the record of the Brexiters’ favourite phrase. When remainers said negotiations would be difficult, leavers said that was project fear at work: it would be the easiest deal in history. When John Major and Tony Blair said Brexit would damage the Good Friday agreement, leavers again accused them of project fear: there would be no border thanks to technology.

Talking about the Treasury’s forecast does not disguise the economic costs of the referendum so far: a fall in average incomes and a substantial drop in inward investment. Most businesses really fear no deal.

The Brexiters’ last resort is to say it is not about economics. There is an element of truth in the culture war argument, but what was sold in the referendum is not what leavers will get. Carmakers advertise their new models by showing glamorous pictures of vehicles gliding around mountain roads – Vote Leave used similar tactics. If you have any doubt about this, you only have to watch Dominic Cummings talking about how he won in 2016.

Did he base his campaign on the concerns Brexiter MPs had about loss of sovereignty? Of course not, because no one understood the EU. He instead talked about taking back control in order to capitalise on the backlash from the financial crisis and austerity. He countered the economic fears of leaving with stories of Turkey’s imminent membership. He talked about £350m so everyone would talk about how much the EU cost rather than its benefits.

Just as people were sold snake oil in 2016, the Brexiters and their press are selling no deal (a “clean break”) in a similar way now. The number of people who will be better off in any way as a result of a no-deal Brexit can be counted in thousands, not millions. If Johnson wins the next election, it will be these thousands who will benefit while the rest of the country suffers.

• Simon Wren-Lewis is emeritus professor of economics and fellow of Merton College, Oxford. He blogs at Mainly Macro