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Why Brexit Must Be Delivered (And Johnson Will Do It)

Summary:
There is no question Johnson will deliver Brexit. The only question is "How?" Barring some stunning gaffe or sudden illness or death that takes him out of the race, Boris Johnson will be the UK's next prime minister. Motion of No Confidence What about a motion of no confidence as backed by Tory MPs Rory Stewart and Dominic Grieve? There are only two problems with the idea. Two Major Problems With Motion of No Confidence Idea It might succeed It might fail 1A: If the motion succeeded, but not in time to hold elections, it would actually trigger the hard Brexit it was supposed to stop. 1B: If the motion succeeded in time for elections, Tories and Labour would both be crucified. The Brexit party would likely win, with no chance of negotiation. 1C: Any Tories voting against their party in a

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There is no question Johnson will deliver Brexit. The only question is "How?"

Barring some stunning gaffe or sudden illness or death that takes him out of the race, Boris Johnson will be the UK's next prime minister.

Motion of No Confidence

What about a motion of no confidence as backed by Tory MPs Rory Stewart and Dominic Grieve?

There are only two problems with the idea.

Two Major Problems With Motion of No Confidence Idea

  1. It might succeed
  2. It might fail

1A: If the motion succeeded, but not in time to hold elections, it would actually trigger the hard Brexit it was supposed to stop.

1B: If the motion succeeded in time for elections, Tories and Labour would both be crucified. The Brexit party would likely win, with no chance of negotiation.

1C: Any Tories voting against their party in a motion of no confidence would be outed from the party and would lose in the next election.

2A: Failure would strengthen the hand of the PM.

2B: Any Tories voting against their party in a motion of no confidence would be outed from the party and would lose in the next election.

2C: Any Labour party voting against their party might suffer the same fate.

The no confidence threat is nothing more than idle political posturing.

Leadership Race is Over

The leadership race is effectively over.

Neither Jeremy Hunt nor Michael Gove can defeat Johnson in a Tory Party vote. The party membership believes that, which makes it self-reinforcing.

Stop Boris Silliness

I discussed the setup in Stop Boris Madness In Five Pictures.

Here is slide number 5.

If the party membership believes, and polls show it does, that neither Hunt nor Gove can win an election, it would be illogical to vote for them.

The party believes Dominic Raab could win, but he is 100% committed to leaving with no agreement. The conclusion is the Remainers will not let the final choice become Johnson vs Raab.

Committed Remainers will all rally around Hunt or Gove, then Johnson, in that order.

Expect Brexit

The fact of the matter, as I explained on May 28, is the UK Parliament Cannot Stop a Determined PM From Delivering a No-Deal Brexit.

What Does Boris Really Want?

That is the only remaining question, but it's the key one.

My assumption, and it could be wrong, is Johnson really is prepared for no-deal.

Eurointelligence is wavering, yet again. It keeps flip-flopping without being committal, only stating things like "odds of no deal are higher than you might think".

Barring an accident Boris Johnson will be the next UK prime minister. The main foreseeable accident - a House of Commons stitch-up against him - is not happening.

One of the best comments this morning is from Simon Jenkins in the Guardian, who makes the point that the rest of the UK should pray for a Johnson Tory leadership because he is the only one to be able to make a U-turn on Brexit and get away it.

We agree with Jenkins' conclusion that the job of the next PM will be to deliver a Brexit compromise. It is illusory to think that there can be, or will be, substantive renegotiations of the withdrawal treaty - beyond the technical clean-ups due to the Brexit extension itself.

We doubt that Johnson will allow himself to be drawn into this debate during the leadership elections. He is hiding. But, once elected, we expect a very brief period of negotiations on the remaining loose ends on the withdrawal treaty and a completely re-worded political declaration, followed by a longer period of political brinkmanship. No-deal Brexit will remain firmly on the table because a deal will otherwise not be possible.

Willingness to Accept No Deal

Boris Johnson won over hard-core Brexiteers by convincing them he is the real deal.

Is Johnson the real deal?

For starters, there can be no negotiation with the EU when one rules out No-Deal.

Despite what Hunt and Gove now say about being willing to accept No Deal, the world (especially the Tory Party members) knows they are liars willing to grant another kiss-of-death extension to stop it.

Shockingly Bad Analysis by Eurointelligence

This Eurointelligence statement caught my eye: "Theresa May negotiated a surprisingly good withdrawal agreement, but her political failure was how she framed the debate in the UK - as a three-way choice. With that she ensured that no option had a majority."

Surprisingly good agreement? WTF?

Let's Discuss Brexit (and How the EU Bragged, on Film, About Screwing the UK)

Barnier admitted, on film, a desire to trap the UK in a permanent customs union.

That's a good deal? Sheesh please click on the above link to play my video.

Exactly the Right Message

Let's tune into what Johnson said on Friday:

No-deal: I don’t aim for no deal. I don’t want no deal as the outcome of the talks. Of course not. I don’t want us to leave with a WTO solution. But I certainly don’t think that some of the promises of doom and disaster are true. And I think we will find plenty of people who will give you a very different verdict about about what no deal would mean. We can get to a situation in which we are able to leave smoothly with an orderly, managed Brexit. And that’s what we should be aiming for. But the only way to make sure that we convince our partners that were determined to get that outcome is to prepare for no deal.

Leaving the EU by 31 October: I think it is perfectly realistic. And there is a clear way that the now effectively defunct withdrawal agreement can be disaggregated. The good bits of it can be taken out. I think what we should do is take the provisions on citizenship, take the offer that we make to the 3.2 million EU citizens in our country and just do it ...
We got to be out by October the 31st. And I think it would be absolutely bizarre for to signal at this stage that the UK government was willing, once again, to run up the white flag and delay yet again. My commitment is to honour the will of the people and take this country out on October 31st. And the way to do it, as I say is to desegregate the current withdrawal agreement and move on.

The Irish Backstop: The fundamental flaw in the current withdrawal agreement, which everybody understands, is the Irish backstop arrangements. That’s a prison, that’s Hobson’s choice. The solution is obvious. It is something that actually united MPs on on all sides of the house when they voted for the Brady amendments. Our friends and partners over the channel will say this is impossible. We can’t do this. It’s the unicorns and so on. And I perfectly understand that. But I think actually there is a solution to be arrived at in that area.

Preparation for no deal: In the meantime, it’s absolutely crucial to prepare for no deal. And I don’t share the deep pessimism of some people about the consequences of no deal. That’s not to say that I don’t think there will be some difficulties that need to be addressed. Unless we show fortitude and determination I don’t think that we will carry conviction in Brussels, about about the deal we want to do.

Avoiding a hard border: Those problems are easily capable of a solution, as I think the Commission has said in the past, with maximum facilitation techniques. You already have goods conforming to different standards. France, for instance, has different laws on flame retardant furniture, and we have no checks at the the borders to intercept goods from France.
The obvious way to do it is to make sure that you have checks on anybody who breaks the law, but you do it away from the border. And that is common ground. Anybody who breaks the law, is clearly going to be subject to checks and investigation. There is already smuggling across that border and smugglers are intercepted in the normal in the normal way. There are ways of doing this, that do not require a hard border.

Switching Irish border questions to implementation phase: The solutions to the facilitation that need to be provided to enable us to do a proper free trade deal with our friends and partners, those should not be preordained by the backstop. But they should be remitted into the implementation period for discussion after we have left it in the context of negotiation of the free trade deal. That is the obvious solution. It’s something that is agreed on all sides of the house. I accept that at the moment, the EU will say we can’t accept that. They’re bound to say that at present. I think that they will find a way forward. It would not be sensible for the UK to depart in that kind of disorderly way. But if we have to get out on no deal terms then it is our absolute responsibility to prepare for it. And it’s by preparing for it that we prevent that outcome.

Persuading the EU to renegotiate: I think what they will see is that politics has changed in the in the UK. And and in Europe. They have now 29 Brexit MEPs. The parties in this country are facing an existential threat. Both the Brexit Party and the Liberal Democrats are leading the polls, as a result of the failure of the two main parties to deliver on the will of the people. That is what needs to happen. It needs to happen by October, the 31st. And we need to get on and do it and all those who say that we should delay that we should kick the can down the road. I think they risk doing terminal damage to trust in politics.

Amazingly Good Speech

That was an amazingly good speech by Johnson. It was very diplomatic, pragmatic, and Prime-Minister like.

It also opens up questions.

Four Possibilities

  1. If Johnson's intent is to deliver a hard-Brexit while avoiding a motion of no-confidence, he succeeded.
  2. If Johnson's intent is to deliver a repackaged Theresa May deal, he succeeded.
  3. If Johnson's intent is genuinely to get the EU to negotiate something beyond May's deal, willing to walk away if he doesn't, he succeeded
  4. If Johnson genuinely doesn't know, he successfully bought himself time.

My Vote - Door Three

My votes, in order, are 3, 4, and tossup.

If his mission is either one or two, he can deliver. Possibility four speaks for itself. It will resolve to one of the first three.

Possibility three is the most interesting.

Neither Gove nor Hunt could pull that off because the EU knows full well neither would ever accept no deal. They are both Theresa May clones.

Assume three. But that leads to the next key question.

Can the EU Bend?

Likely, no, but it is possible. Future bargaining points are more likely.

Please recall Debate Over Brexit Fee: Would Nonpayment Constitute Default? Who Owes Whom?

Johnson pledged a willingness to not pay the EU a damn thing. It was a very smart thing to do, but two Telegraph writers totally blew the call.

That move, puts strong monetary pressure on the EU. How will it meet its budget? Sudden tax hikes?

In return for Johnson not walking away with no Brexit bill payment, Johnson can get something. If the EU agrees to quickly resolve the Irish Backstop, we have the makings of a deal Johnson can accept.

Managed No Deal

Even if, the EU cannot bend by modifying the May-negotiated deal, it can agree to smooth out a Hard Brexit and agree to negotiate a quick resolution to the Irish backstop.

This is a reasonable possibility if Johnson does a couple of things: Grant rights to EU citizens living in the UK, agrees to the Brexit fee. Negotiation is highly likely to be in this area.

This would be tantamount to the "managed No-Deal Brexit" theme, perhaps very similar to the dismissed Malthouse Compromise Unicorn.

Best Interests of UK and EU

It is in the EU's best interest as well as the UK's best interest for a managed No Deal to happen, if that is what Johnson wants.

Germany is in a world of hurt. Its exports would collapse in an acrimonious no-deal, especially if the British pound fell further. And the EU will not be able to meet its budget if Johnson simply walks away.

If the EU refuses to bend at all, Johnson has his out. And if his goal is number one, he can easily feign an attempt to bargain, while blaming the EU.

Expect a Unicorn

The above analysis leads to a chance unicorn discovery.

This would make Johnson an instant hero, and he has to know that.

The poor bargaining position of the EU and the ability to become an instant hero suggests a unicorn will be found.

What then?

The Brexit Party would no sense of existence.

Johnson, the hero, having gotten the EU to bend, would call for quick elections and win, possibly in a landslide over Labour still split over the result.

Mike "Mish" Shedlock

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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