BoJo readies UK for hard Brexit

Via the FT:

The UK chancellor of the exchequer, Sajid Javid, is preparing to announce more than £1bn in increased funding for a no-deal Brexit after Michael Gove, the minister in charge of no-deal preparations, said such an exit was a “very real prospect”.

A person familiar with Mr Javid’s thinking said that, while the exact figure remained unclear, the extra funding for no-deal preparations would be “over £1bn”, adding substantially to the £4.2bn allocated to no-deal planning under Philip Hammond, the previous chancellor.

However, Tory MPs opposed to Boris Johnson’s stated commitment to leave the EU by October 31 with or without a deal, are stepping up their own preparations to try and prevent the UK crashing out without an agreement.

…The clearest signal of growing discontent over the direction of policy came from Ruth Davidson, the leader of the Scottish Conservatives.

“I don’t think the government should support a no-deal Brexit and, if it comes to it, I won’t support it,” Ms Davidson wrote in the Mail on Sunday.

…However, a person familiar with the thinking of Conservative MPs organising opposition to a disruptive exit without a deal said efforts were under way to ensure a grouping of anti-no-deal figures was organised before parliament returns on September 3. The grouping is expected to mount a publicity campaign to counteract the government’s own campaign publicising its preparations. It is also expected to recruit a polling expert and to seek funding from business figures.

Wolfgang Munchau’s EuroIntelligence wraps it nicely:

Forget the cabinet reshuffle. The one single appointment we take very seriously is that of Dominic Cummings. The head of the Vote Leave campaign has been given the position of special adviser to the PM, with responsibility for Brexit and the civil service. He is essentially the CEO of Number 10, Downing Street.

Cummings has been immortalised by the Cumberbatch movie The Uncivil War, in which he was portrayed as the mastermind behind the Vote Leave victory. We rate him as probably the smartest political operator in the UK right now, somebody who often works outside the policy consensus. He was the first campaign manager to use modern Big Data methods in political polling and campaigning. His elevation underlines our expectation that Boris Johnson will do his utmost to deliver Brexit by the end of October. And that he is getting ready for an election at some point in the autumn.

We don’t know what Cummings is plotting, but we do know that this a guy who is gaming the scenarios in a way that Theresa May’s people didn’t. And we know that he will be operating from different data sets than those of most pollsters.

The strategy will be to take the negotiations with the EU to the brink, and then either agree a deal at the last minute or walk away. We have argued from the beginning that the UK parliament massively overestimates its own role in being able to micro-manage the stages of the Art. 50 process. Its ability to force an extension is far more limited than is widely acknowledged in the UK. A no-deal Brexit will be a consequence of the EU not agreeing to a deal, or of the UK parliament not voting in favour of a deal that Johnson presents. At no point will he advocate no deal himself. All he needs to do is not to seek an extension.

This is a dynamic process. MPs will think twice before openly rebelling against Johnson if only because the result of any rebellion is highly uncertain. We suspect that the much-predicted Tory rebellion of 10-20 MPs voting against the government in a no-confidence motion is going to wither – especially once Remain MPs start to think it through, which they have not done yet.

It is no secret that Boris Johnson is held in contempt by the chancelleries of Europe. But, whatever EU leaders think of him personally, they will soon be confronted with a formal request to re-open negotiations on the withdrawal treaty.

EU unity has held up extraordinarily well during the entire Brexit negotiations, but this is because the EU was confronted by a weak negotiator. Olly Robbins gave the game away when he said that either the Commons would vote for the treaty, or Brexit would be postponed for a long time. From the EU’s perspective, this was a game of head-I-win, tails-you-lose.

But, when confronted with a partner willing to accept a no-deal Brexit, the situation changes. The EU will need to consider, for the first time in earnest, the political dynamics in the European Council in the days and hours before a no-deal Brexit. Are they really prepared for it as they say? Politically and technically?

We don’t think so. The German media has spent the last two years in denial that Brexit is happening, focusing much of its reporting on the second-referendum campaign. Lately they switched to portraying Johnson as a buffoon or, in the case of Spiegel, as a madman. But what will happen once they realise that Germany is about to face tariffs in the two largest export markets for its cars, the US and the UK? We think that complacency will turn to panic overnight, as it so often does in European politics. The EU will need a strategy to deal with the Johnson administration. EU leaders will need to explore among themselves how far they will go in opening up the discussion on the Irish backstop. And they will need a no-deal strategy that goes beyond the regulatory preparations of the European Commission.

The key is the highlighted sentence. Britain is going to Brexit October 31 if nothing changes. It seems to me that the panic will also need to be of the markets variety to have any chance of stopping it.

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