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The case for a hard Brexit: why it might not be all doom and gloom

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The case for a hard Brexit: why it might not be all doom and gloom

The case for a hard Brexit: why it might not be all doom and gloom
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Reuters/Toby Melville
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This article has been updated to take account of Theresa May's plan unveiled at Chequers on July 6 and the subsequent resignations of government ministers.

There have long been warnings that either a so-called “hard Brexit” or a “no-deal scenario” would be damaging for the EU, and catastrophic for the UK.

Brexit supporters have always dismissed such ominous tidings as “Project Fear”, and the recent sudden surge of alarm from business has done nothing to change their minds.

Most of those cast as Brexiteers say they want to see an agreement between London and Brussels. However, they have turned one of Theresa May’s slogans into a mantra: “no deal is better than a bad deal”.

They argue that by standing firm, Brussels will bend. Although EU insiders point out that defending its principles – protecting the single market and ruling out “cherry-picking” from EU rules, for instance – are a matter of survival for the bloc.

For Brexiteers however, freedom from EU ties paves the way for a bright future for “Global Britain”. In contrast, sticking close to EU rules and regulations would not be a true Brexit and therefore would undermine the results of the people's vote.

Above all, they say the UK could thrive even if no accord is struck by the time of the UK’s departure from the EU in March 2019.

Their arguments have been put into sharp focus by the high-profile resignations from the government of two of their champions: the ex-Brexit minister David Davis, and the former Foreign Secretary Boris Johnson.

It’s the Red Lines, stupid

The prime minister and her government have often defined Brexit as being about “taking back control”: after it leaves the EU, Britain will control its own borders, laws, and money.

Theresa May has long said that the UK may choose to stay close to EU rules and standards – but sovereignty, decision-making and judicial oversight will come back across the Channel from the continent.

However, her red lines have become increasingly blurred as compromises have been made over financial contributions to the EU, immigration, jurisdiction and more.

Recently May has been widely seen as increasingly steering the country towards a softer Brexit, out of tune with her earlier robust statements. Her latest plan unveiled to ministers at Chequers as the blueprint for proposals to be put to the EU, has brought fears that it will not mean Brexit but BRINO – “Brexit In Name Only”.

Cut loose at all costs: the world beckons

Brexiteers argue that the UK needs to stop being tied to the EU’s apron strings, in order to have the freedom to do trade deals around the world.

They say there are massive opportunities to trade internationally. Britain’s future lies in developing markets outside the European Union, with places like Asia representing an ever-increasing slice of world growth. In contrast, some say, Europe is in decline.

Adhering to “regulatory alignment” with EU rules and regulations in order to keep trading smoothly means the UK will become a “rule-taker” outside the bloc with no say.

Not only that, they argue that striking trade deals outside the EU would become harder to do – as freedom to meet other countries’ demands would be restricted.

They are looking for an accord with Brussels that has been described as “SuperCanada” or “Canada+++”, a free trade agreement based on Canada’s Comprehensive Economic and Trade Agreement (CETA) – arguing that such a prize has even been offered by European Council President Donald Tusk.

Trading the high seas: a tariff-free paradise

Under a “no-deal scenario”, the UK would conduct its trade under World Trade Organisation (WTO) rules.

This is widely interpreted as meaning higher tariffs, but Brexiteers dispute this. They argue that Britain could lead the way in cutting tariffs to zero to ensure seamless free trade.

“We don’t want any tariffs anywhere, and under those conditions a newly independent UK, outside the customs union, outside the single market, outside the ECJ (European Court of Justice)… will have access to the world,” former UK government minister Owen Paterson told BBC Radio. “Our current European suppliers, who we value a lot, will have to compete on world terms. That will bring prices down for every business and every single family.”

MaxFac Fever

Tariffs are not the only barrier to trade. Businesses also point out that EU rules mean no border checks, enabling complex supply chains to operate smoothly, delivering components “just-in-time”.

Brexiteers advocate a maximum facilitation or “MaxFac” proposal for life outside the customs union. An existing “trusted trader” scheme could be extended. Customs checks could be carried out via electronic surveillance, including vehicle number plate recognition technology.

They detest an alternative “Customs Partnership” scheme – May’s latest plan is seen as a variation of it – arguing it’s likely to keep the UK in a customs union with the EU, tie the UK to product regulations, and preclude future trade deals.

Brussels doesn’t like either proposal, leading to much anticipation over how it will respond to May’s “third way” plan.

Irish border problem: ‘an EU myth’

The UK and the EU are committed to maintaining an open border between a future Northern Ireland outside the bloc, and the Republic of Ireland which is an EU member.

Avoiding a hard border has been seen as trying to square a circle, virtually impossible if the UK leaves the customs union and single market.

Some Brexiteers argue that the danger of a hard border is overstated, and does not threaten the Good Friday Agreement that ended 30 years of sectarian strife.

An open border with no physical infrastructure is still possible, they say. Dublin and Belfast already diverge on many matters including tax and excise duties, unproblematic for peace and stability.

Immigration can still be controlled, and anyway the Common Travel Area enabled free movement across the border for 50 years before EU membership.

For goods, customs controls will indeed be needed after Brexit but that doesn’t need to involve border checks or infrastructure. On standards, the fact products start from a position of regulatory alignment will help.

A common Brexiteer assertion is that Brussels, Dublin and Remainers play up the “intractable” Irish border problem as a matter of political expediency.

No Luxembourg judges please, we’re British

Brexiteers want Theresa May to stick to her pledge that “our laws… will be interpreted by judges not in Luxembourg but in courts across this country”. The government has vowed that jurisdiction of the European Court of Justice (ECJ) will end “on the day the UK leaves the EU”.

However, the UK has conceded that the ECJ will continue to have influence on British court decisions. Under the agreement over a transition period until the end of 2020, it will continue to have jurisdiction.

Brexiteers such as Jacob Rees-Mogg, head of the Conservative European Research Group, are alarmed that the government’s latest plans “may even leave some sort of backdoor role” for the European court. “This would be a deeply unsatisfactory non-Brexit,” he told the BBC.

“The European Court of Justice should be recognised in the same way as the Supreme Court of the United States is recognised. It has authority over its own territory, and over what goes on within its territory and with agencies that are covered by it. It ought to have no writ within the United Kingdom,” he argued.

On trade, he says the ECJ naturally has jurisdiction in the European Union – but not over goods that enter, are sold or made in the UK, unless they are exported to the EU.

Don’t be afraid to walk away

Brexiteers are often staunchly adamant that a good deal is there to be done with the EU. They reject as “totally wrong” claims that ministers have no chance of striking a “bespoke” agreement, Theresa May’s stated intention.

The EU is accused of trying to intimidate the UK into accepting a bad deal, for fear of having none. The government should call Brussels’ bluff and make it clear that Britain is not scared of – and has prepared for – the infamous “no-deal”.

Many, like Howard Flight – a Conservative member of the House of Lords – argue that Britain can strengthen its hand by threatening to withhold its financial settlement if there is no guarantee of a trade agreement.

If Brussels refuses to bend, the UK should walk out of the talks, he wrote in BrexitCentral, the pro-Brexit website.

“Now is the time to take the lead; to reaffirm what deal is acceptable to us, and if refused, to exit negotiating and rely on the WTO. The reality is that our position is stronger than that of the EU.”