Boris Johnson could still strike Brexit deal with close EU alignment, says former minister

Parliamentary opponents of a hard Brexit have not given up hope that Boris Johnson will eventually sign up for a trade deal with close alignment with the EU, one Remain-backing former cabinet minister has told The Independent.

The 80-seat Conservative majority in December’s election has led to a marked hardening in the UK’s stance on trade talks, with the prime minister declaring that he believes Britain will “prosper” in a no-deal Brexit – which he now refers to as an “Australian-style settlement” – and ditching ambitions for frictionless trade with the remaining EU.

But the ex-minister said that many in parliament expect him to back down as the reality of no deal approaches at the end of 2020, setting the scene for a do-or-die decision for Mr Johnson between inflicting serious harm on the economy or splitting his party.

With the economic shock of departure without a trade deal likely to ramp up pressure for Scottish independence and Irish reunification – and with emboldened Eurosceptics on his own side pushing for the hardest possible Brexit – Mr Johnson may have to rely on opposition votes to land a softer deal if he wants to avoid going down in history as the PM who crashed the economy and broke up the union, said the ex-minister.

And the experience of last October, when Mr Johnson abandoned his DUP allies and accepted EU demands for a customs border down the Irish Sea in order to salvage his “divorce deal”, suggests he may do the same again, the ex-minister suggested.

“Despite everything, I think that close alignment is still the most likely outcome of this,” said the MP. “If there’s a deal to be had with Brussels, it will be a deal with alignment on all sorts of things – social, environmental, workplace protections.

“That agreement is there to be had and the alternative is no deal. There isn’t a deal on offer that will give the UK easy access to the single market with no alignment. The question is which way does Boris jump?

“I’ve no doubt the prime minister will huff and puff right up to the wire about being ready to go for no deal, but just like last year he will be ready to fold at the last minute.”

Treasury forecasts from 2018 put the damage to the UK economy from Theresa May’s softer Brexit deal, which accepted a degree of alignment with Brussels rules as a means to achieve as close to frictionless trade as possible, at 3.9 per cent of GDP over 15 years. By contrast, a no-deal Brexit could hit the economy by as much as 9.3 per cent over the same period, compared to the outcome from remaining in the EU.

The government is yet to update these predictions, which the ex-minister said suggested it was aware that they remain valid.

Already hauliers and businesses dependent on imports and exports are raising concerns about the prospect of increased red tape under Mr Johnson’s preferred “Canada-style” free-trade agreement and tariffs and other barriers to commerce under an Australian-style no deal.

Meanwhile, the purported advantages of freedom from “level playing field” alignment with Europe appear to be fading, as the prospect of a US trade deal becomes more remote due to differences with Washington over US corporations’ access to the NHS, public health restrictions on foods like chlorinated chicken and the PM’s decision to allow Huawei a role in the UK’s 5G telecoms network.

These factors are likely to translate into intense pressure from business for the PM to sign a free trade agreement of some sort as the clock clicks down to 31 December.

But just as Ms May was blocked from getting her deal through by rebels from the Tory European Research Group, the ex-minister forecast that backbench Eurosceptics will baulk at supporting any agreement which limits the UK’s scope to decide its own rules and regulations.

Their numbers have been bolstered by the large influx of new Tory MPs from formerly Labour Leave-voting seats in the midlands and the north, who regard their instructions from their constituents to be to get Brexit done in the cleanest way possible.

And the stock of potential ringleaders for a eurosceptic rebellion has been dramatically increased by this week’s reshuffle, which saw hard Brexit figureheads like Andrea Leadsom, Esther McVey and Theresa Villiers thrown out of the government.

“Yes, he’s got an 80-seat majority, but he only needs 40 of the ERG to decide that he is selling out British sovereignty and suddenly he’s relying on opposition votes,” said the ex-minister.

“There were plenty more than 40 ready to vote against Theresa May’s deal, and the election result and Brexit day itself have emboldened them. They feel like they’ve got Brexit under their belt and now they want more.

“Added to them are the new Tories from the north, who are a lot more pro-Brexit than earlier generations of Conservative MPs. They’re going back to their seats and going to the working men’s clubs where people are solidly Brexit and just want to see an end to immigration and aren’t too fussed about the economics of it. And they have Nigel Farage and the Brexit Party breathing down their necks.”

Warning that the prime minister’s actions since the election have painted him into a corner as his self-imposed 31 December deadline for a deal grows nearer, the ex-minister said: “The question really is whether Boris prefers to wreck the economy by going along with his backbenchers and going for no deal – or the Australia option as he’s now calling it – with all the disruption to trade and price hikes and business closures and job losses that would mean, not to mention going down in history as the Tory PM who broke up the union.

“Or whether he prefers to be the Tory PM who split the Conservatives and got a deal with Brussels through on the back of opposition votes.

“He seems to be sitting pretty now, but I think that’s the outcome he’s faced with.

“And he’s painting himself into a corner now with all this defiant rhetoric about the UK breaking away from the bonds of Europe and sailing off to blaze a trail around the world. The Brexit wing of his party love that stuff. It fires them up and it will be difficult for him to rein them in and persuade them that sticking with the trade links we already have and maintaining them is the better option.”

Ironically, the ex-minister said, if Mr Johnson does decide to go for a deal with some sort of level playing field on regulations, the UK’s departure from the EU on 31 January will make it easier for him to win the support of Remain-backing opposition MPs, who no longer have the dream of blocking Brexit to hold onto.

“If he goes for a deal, most of the opposition will be ready to back him rather than risk no deal, because the option of revoke just isn’t there any more,” said the ex-minister. “It’s ‘deal or no deal’ now, not ‘deal or no Brexit’, and that changes the calculations. In the end, it’ll be Boris’s choice, there’ll be a majority there for a deal, but his party may never forgive him for it.”