The EconomistJuly 27th 2019 Britain 432 (a charge he denies). Sir Michael Fallon, an-
other campaign stalwart, resigned for in-
appropriate behaviour with female jour-
nalists. Ms Patel, the incoming home
secretary, stepped down in 2017 after she
was caught running diplomatic back-chan-
nels with the Israeli government.
A government laced with Brexiteers will
have to force Britain’s departure from the
euthrough a much less gung-ho Parlia-
ment. Mr Johnson must woo two very dif-
ferent caucuses. On one side sit the self-
styled “Spartans”—the two dozen mps who
voted against Theresa May’s exit deal every
time it came before them. By its third out-
ing, other hard-core Brexiteers such as Mr
Raab, Mr Rees-Mogg and even Mr Johnson
had folded and voted for the deal. The hold-
outs are a tougher bunch—and, having
crushed one pragmatic deal, they are un-
likely to vote for a dolled-up version of the
same document. On the other side sit in-
creasingly recalcitrant Remainers. Former
cabinet ministers such as David Gauke and
Philip Hammond have made it clear that
they will fight any attempt by Mr Johnson
to leave without a deal.
It only takes one
Mr Johnson’s government hangs by a
thread that is easily snipped. If his majority
falls to one, a single hitherto unknown
Conservative mp, hardly recognised be-
yond close relatives, could decide the fate
of Britain by backing a no-confidence vote.
Mr Johnson’s supporters insist that
tough talk about Conservative mps being
willing to bring down their own govern-
ment, or cross the floor to the Liberal
Democrats or Plaid Cymru, is just bluster.
They point out that Labour mps were ex-
pected to pile in and support Mrs May’s
deal earlier this year; in the event, few de-
fied the party line. But there is a difference
of scale. Whereas it would have taken a
squadron of rogue Labour mps to force
through Mrs May’s deal, Mr Johnson could
be brought down by just a few. “You blow
your career up,” admits one former cabinet
minister, before adding: “Some won’t care.”
An election without Brexit being sorted
would be hazardous for the prime minis-
ter, as some Tory voters switch to a surging
Brexit Party. A ballot after a no-deal Brexit,
with chaos at British ports, livestock
slaughtered en masse and medicine short-
ages, could be a massacre. By comparison,
a vote following a successful Brexit deal
could easily become a victory lap. Suppor-
ters predict an election this autumn re-
gardless. If Brexit is sorted, it would make
no sense for a government to limp on with-
out a majority, explains one aide. If Brexit
rumbles on, then fed-up hardliners may
bring down the man who once led them. Ei-
ther way a vote is coming. Mr Johnson the
statesman may be short-lived. Mr Johnson
the campaigner will return soon. 7A
part from Economists for Free Trade
(eft), a pro-Brexit group, almost no
wonks believe that leaving the euwithout a
deal would be good for the economy. The
majority flinch when Boris Johnson, the
new prime minister, promises that Britain
will push off by October 31st “come what
may”. Yet the question of just how bad a no-
deal Brexit would be has many answers.
On July 18th the Office for Budget Re-
sponsibility (obr), the fiscal watchdog,
warned that a no-deal exit would “push the
economy into recession”. The next day Ox-
ford Economics argued that “no-deal Brexit
might be bad, but not obr bad.” Capital
Economics, another consultancy, wrote
last year that in its central no-deal scenario
“we don’t expect...a full-blown recession.”
Estimates of the long-term effect on gdp
are even more varied (see chart).
If Britain leaves without a deal it will be-
come a member of the World Trade Organi-
sation on its own, not as part of the eu. Brit-
ain would generally have to charge the
same tariffs on eu imports as on non-eu
ones. Regulations governing everything
from medicines to electricity connections
to financial services could lapse.
Three big judgments shape economists’
views of the eventual impact of this. The
first is precisely what happens to tariffs.
The eft assumes that Britain unilaterally
cuts all of them to zero, boosting trade and
thus economic growth. Most economists
think that too optimistic.
The second issue is what happens to
non-tariff barriers, such as regulations, be-tween Britain and its trading partners.
Plenty of academic work looks at the eco-
nomic impact of entering a big trading
bloc, but there is much less on countries
leaving, since this rarely happens. Will the
non-tariff barriers that were lowered dur-
ing Britain’s membership of the eurise
again when it pushes off? The government
estimate shown in the chart assumes that
the majority will be. Others, including
from Rabobank, use estimates of non-tariff
barriers between the eu and America as a
guide to what Britain could face.
The third judgment concerns so-called
“dynamic effects”. Economists often as-
sume that a reduction in openness to trade
will crimp long-term productivity growth,
in part because specialisation is more diffi-
cult and in part because inward investment
from abroad would be lower. One paper
from the London School of Economics,
which looks at the impact of Britain mov-
ing to wto rules, finds that including these
dynamic effects triples the estimate of lost
gdp per person.
Brexiteers argue that most economists
are too negative—just as they were about
the impact of the vote to leave the euin- Following a chaotic exit, the Bank of
England could radically loosen monetary
policy, and the government could ramp up
spending or slash taxes. Perhaps. But even
the gloomiest economic forecasts only
paint a partial picture of what could hap-
pen following a chaotic exit. Shortages of
medicines, violence at the Irish border,
shuttered farms and panicky immigrants
might not affect the economy much. But
there is more to life than gdp. 7
Why predicting the impact of a no-deal exit is so hardThe economics of no-deal BrexitHow bad, exactly?
Shades of gloomSource:InstituteforGovernment *To around 2030Britain, long-term* impact of Brexit scenarios
%changetoGDP-20 -15 -10 -5 0 5Rabobank
LSE
GovernmentForecasterOxford Economics
Economists for
Free TradeEuropeanEconomicArea
FreeTradeAgreementWorld Trade Organisation
Unilateral Free Trade