You may have played the game “The Prisoner’s Dilemma” where two people have to decide whether to trust each other or not and see if one person can get a better deal than the other.
A game similar to this has been played ever since the Brexit negotiations started. I suspect that for many years after the Brexit process has finally finished, people will study it as an object lesson on how to conduct negotiations or not as the case may be.
One of the reasons why it was so difficult to obtain Parliamentary approval for any course of action from 2017-19 was that each faction felt it could win on its own terms within the House of Commons. Those who wanted Brexit overturned felt that the easiest way of facilitating that was to oppose all deals. The faction proposing a close Brexit but with a very close alignment e.g. EEA/EFTA which would have meant membership of the Customs Union and or the Single Market felt that they could push Parliament towards this. There was another strand of opinion which supported the May withdrawal agreement and then a further strand of opinion which wanted a much looser arrangement with the EU.
The likelihood is that if the first three factions had agreed a common platform which would have required compromise on their part then, the UK would have been in very close alignment with the EU on issues such as tax, regulation and standards. However, they overplayed their hand and the 2019 General Election result brought to power with a large majority the grouping that wanted a more distant relationship with the EU.
The choice now is between a Canada style agreement or an Australian agreement based on WTO terms. Both of these scenarios are a large distance away from what was envisaged in the aftermath of the referendum by the majority of MPs and commentators.
The acceptance by the Johnson government that “friction” at the borders is a necessary price to regain sovereignty over issues such as tax and regulations as well as trade policies means that the break on the 1st January 2021 will have wider consequences for business than had previously been envisaged.
Primondell is running a number of seminars on the consequences of the end of the transition period.
For further details please contact Jeremy Mindell at jpmin20@gmail.com
