As everyone will now agree, we are leaving the European Union in short order. Well, sort of. We lose our MEPs and seat on the Council in a few weeks time, once the Withdrawal Bill passes parliament, but after that we go into a transition period in which everything apart from our having a voice in anything stays the same.
Boris and his lieutenants have declared that this transition period, due to end at the close of 2020, will not be extended. Many have pointed out two key points in relation to this: one is that Johnson promises many things that never come to fruition. Secondly, now that he has a large majority, he can kind of do what he likes. If he wants to extend to get a better deal – and extending would give a better deal a much better chance of happening – then he can do.
Whether Boris extends or not, I think there are two possible Brexit outcomes. One is what we would think of as a relatively soft Brexit: heavy alignment with the EU, basically. Some are talking this up, others discounting it completely, but I wouldn’t underestimate this possibility. Boris tested the water when he constructed his Withdrawal Agreement and discovered just how much anyone actually really cares about the details of Brexit. Answer = almost not at all. Farage found that out when he tried to attack the deal for all of the reasons that had until then been the core of Brexiteer argument, only to find that no one was listening. Johnson has discovered that a BRINO will fly with almost everyone who matters.
However, I have been thinking about this all weekend and I’ve think I’ve figured out the more likely scenario. It is a form of Brexit that has always been there when you think about the main spokespeople for leaving the EU. We leave at the end of 2020 with a barebones deal. This will screw over the fishermen, amongst others, but they were always in line to get screwed over, like the Northern Ireland Unionists were always going to get screwed over. The basics of this plan are this: massively deregulate the city and banking in general. Make the City the hedge fund heaven. Get rid of the Alternative Investment Fund Managers Directive (amongst others) which is hated in the sector. Loosen money laundering regulation. Make London the place to put dodgy money worldwide.
This will fuel London while other parts of the country that rely on being in the single market and/or customs union whither. Most manufacturing and certainly the automotive industry will suffer badly. The Tories then make up for this by hoping the tax base expands due to all this activity in the City and if not, borrowing to spend money on the north and the Midlands where most of the pain from Brexit will be felt.
I’ve only sketched this out in the broadest detail, but I think this is probably the most likely route Brexit takes. The City becomes laissez faire on steroids, while most of the rest of the country becomes Corbynomics central – which is pretty ironic when you think about it.
Why do I think the latter scenario is so likely to play out? If you fit together the writings of Dominic Cummings, what Brexiteers say in private when they are being brutally honest (or in the rare select committee when the truth comes out), and the Conservative’s 2019 general election campaign, this is what you inevitably come to as a destination. And it will probably work – for a while. The pro-Leave areas which are relatively economically deprived will be happy that we’ve left the European Union and at the same time, government money is flowing into their communities. At least, this is what I believe the Tories may be banking on.
As I say, it will work for a while. Until we have some repeat of 2008 in which the City will be left ruthlessly exposed and we will be mortgaged to the hilt because of the money we’re splashing around north of Watford Gap. But who knows, perhaps I shouldn’t be so negative. Maybe the architects of this plan have thought all this through and have plugged in several things I haven’t considered. At least, that’s what I’m hoping is the case.