This was, by all accounts, a horrendous performance. Davis looked shattered, uninterested and gave a few answers in particular that give cause for concern. The main reveal was that Davis said there had been no economic assessment of crashing out of the EU with no deal done by the government under his time. Pat McFadden quickly pointed out the contradiction here: "You said no deal was better than a bad deal. But you haven't made an assessment of no deal. So why say it?" Davis followed up with "You don't need a piece of paper with numbers on it to have an economic assessment." and also enlightened us as to the impacts of 'no deal' with "It's not as frightening as some people think but not as simple as some people think." As I've said before, the government is now in full-on pre-negotiation signalling mode, wherein what their position appears to be is more important than what it actually is. This makes it all but down to guesswork for the rest of us as to what is actually being done and what isn't.
What are the chances that the government has actually done such an impact assessment but won't tell us about it? Maybe because it would show that 'no deal' is realistically going to be the worst deal? That is pretty much the conclusion of the recent report released by the Foreign Affairs Committee, which I did a short summary of here. The government also does exactly this kind of assessment all the time, it did for both TTIP and CETA. The National Board of Trade Sweden actually just put out a report looking at options for a future regulatory and customs framework between the UK and the EU, more than the UK government has done. The trouble with the government's strategy is that it is only serving to exacerbate the sense of uncertainty and unease about what we are walking into. Either the government really is taking liberties and is walking the line of incompetence, or it is very happy to give the impression that it is, which does nothing to give anyone any confidence. A recent poll done by GMB showed that when asked whether "the government should now publish its assessments on what it thinks could happen to different industries and parts of the UK economy", twice as many people said yes than no (55% to 23%, with 22% don't knows). On the same day the poll was released, the European Trade Union Confederation called upon the European Commission to publish such impact assessments, to fill the void left by us. The government will not be able to hide from the harsh realities for long. On these points I must recommend this blog by Owen Tudor.
The other issue with the current strategy is that it is constantly giving weight to the idea of 'no deal' (a scenario which is unlikely) and is forcing others to pick the government up on it, making them look increasingly wriggly under pressure and weakening any strategic advantage they think they have. Questioned by Hilary Benn, Davis admitted that we would probably need rules of origin under any new scenario, and that indeed under 'no deal' certain sectors would face tariffs of up to 40%. Donald Tusk wrote on Twitter last week that "We will not be intimidated by threats that no Brexit deal is good for UK & bad for EU. No deal bad for everyone, above all for UK." The bluff doesn't seem to be holding up particularly well, and the government's control over its own hand is slipping as they force ever-increasing scrutiny.
The negotiating game that the government is playing is very reminiscent of game theory in economics, or more specifically, the prisoners dilemma - wherein two sides acting in their own best interests can end up forcing the worst overall outcome. I was going to do a blog on this, but Neil McCulloch beat me to it, read his take here.
Episode 3 of the Last Week In Brexit podcast is now up on ITunes, Episode 4 is being recorded tomorrow morning and will be live shortly after.