Taking no deal off the table would leave us at the EU’s mercy

Jeremy Corbyn has always been a unilateralist. He wanted to scrap our nuclear deterrent against the Soviet Union at the height of the cold war. So it should be no surprise that he insists Britain should unilaterally disarm in its negotiations with the EU. That is what his demand that Theresa May take no deal off the table means. If we rule out leaving with no withdrawal agreement, we would have to accept whatever terms the EU dictates. Whatever the price tag (£39bn is just for starters), whatever the loss of control over our borders and laws, however great the humiliation – we would have to accept it to avoid no deal.

What is surprising is that the CBI apparently agrees with Corbyn’s unilateralism. It, too, wants to abandon the option of leaving with no withdrawal agreement on 29 March. Yet would a single successful business in this country enter into negotiations with a customer or merger partner without being prepared to walk away without a deal if it could not get a satisfactory one?

Moreover, if a director publicly said during negotiations that the firm could not walk away without an agreement, they would be sacked for undermining the firm’s bargaining position.

Yet that is what the chancellor, Philip Hammond, and Ken Clarke have done – most recently in their briefing of 300 business leaders – thereby weakening May’s bargaining position. Of course, the CBI (to which so few businesses belong that it refuses to reveal how many direct members it has) is led by bureaucrats, most of whom have never run a business in their lives and whose track record on policy is lamentable. It warned that it would be a disaster not to join the European exchange rate mechanism (ERM), a disaster to leave the ERM and a disaster not to join the euro.

No-deal Brexit would mean hard Irish border, EU confirms

A real businessman I spoke to recently was despairing of the CBI approach. He gave a vivid example of how essential it was to be ready – and seen by your negotiating partner to be ready – to walk away with no deal. Having discovered an offshore oilfield, he had to negotiate a contract with the only nearby pipeline company to bring the oil ashore. The company thought he had no alternative so demanded an exorbitant fee. He therefore not only declared that he was prepared to build his own pipeline but hired headhunters to recruit people to build it. Word reached the pipeline company and a reasonable deal was negotiated. The businessman said: “The £20k we spent on headhunters was the best investment I ever made – it showed I was prepared to walk away.”

So, let’s not begrudge a few million spent on preparing to leave with no withdrawal agreement. Those preparations may prove unnecessary – but only because they persuade the EU to agree a last-minute withdrawal agreement shorn of the intolerable backstop and commitment to pay £39bn for nothing in return.

Of course, it would be best to agree a Canada-style free trade deal (which Donald Tusk offered in March and again in October) so that we can continue to trade with the EU with zero tariffs. But we must be prepared to leave on WTO terms if the EU will not revert to a free trade deal immediately.

Leaving on WTO terms has three big positives. First, we keep £39bn – we would be cashing in not crashing out. Second, we would end the corrosive economic and political uncertainty that would otherwise grind on for more than two years. Third, we would force Ireland, the UK and the EU to resolve the Irish border issue by administrative means, without checks at the border – as all have said they will do if we leave without a withdrawal agreement. This would clear the way for a Canada-style deal covering the whole of the UK.

Moreover, it is increasingly obvious that the supposed downsides of leaving with no withdrawal agreement have been exaggerated or eliminated.

Most of the scares about shortages of medicines, food etc assumed there would be delays at Dover or Calais. But HMRC says it will carry out roughly the same number of checks as at present because checks relate to the risk of smuggling drugs and cigarettes, and illegal immigrants – none of which will increase post Brexit. Moreover, it will “prioritise flow over compliance” and wave vehicles through even if their customs declarations are incomplete.

Now the Calais port chairman has confirmed that Calais, too, will have no more checks than at present. It is determined and confident that traffic will flow freely – not to be nice to Britain but to avoid losing trade to Belgian ports. It is installing three extra lorry lanes, an inspection post for animals away from the port, and a scanner for trains moving at 30km/h.

And it is indignant that the British government is – unnecessarily in its view – hiring ferries to take trade to other ports.

The EU itself has removed other fears. It is legislating that planes will fly, lorries will get licences, Airbus can export its wings, and that live animals and animal products will be “swiftly” allowed entry. This is all subject to the UK reciprocating. It could be described as a “managed no deal”.

Many of those urging us to reject the option of leaving with no withdrawal agreement know it would, as Aneurin Bevan warned of unilateral nuclear disarmament, mean sending British ministers “naked into the conference chamber”. But they want us to be forced to accept such humiliating terms that Britain might choose to return with its tail between its legs to beg to be allowed to stay in the EU. They misjudge the resolve of the British people.

• Lord Lilley is a former Conservative MP who was trade and industry secretary from 1990 to 1992

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