Most things in life come down to numbers, and that is the case if odds are applied to events.
Over Brexit, if politics and personal views on leaving the EU in five months time are stripped away, we can come up with odds on key outcomes. However, as the political debate around Brexit is a moving target boiling it down to odds is not easy.
It is 90 per cent plus certain that we will leave the EU next March, and the odds are probably similar against there being a second referendum. That is ironic, given that recent surveys have suggested there would be a big enough switch to change a narrow leave victory in 2016 into a narrow remain one now. However political realities are that the decision is not going to change. With that set the key issues are what trading relationship we will have with the EU and the rest of the world. Here the options are a hard Brexit with no deal, a continuing customs union, or some form of Canada-style free trade deal, with tariffs negotiated on a commodity by commodity basis.
Failure to convince the World Trade Organisation to let the UK apply it’s tariff regime has moved the odds against a no-deal Brexit. So too has inescapable economic logic. Few beyond the extreme Brexit wing of the
Conservative party believe no deal would deliver the best outcome for the UK. They may still like the politics of such a decision, but they know the economic risks would be too great. On that basis it remains a possibility, but the odds of it happening have to be in the ten per cent range.
The Canada style deal would be based around free trade, but with decisions taken about whether no tariffs would apply taken for each commodity. This works for Canada, because it is not a big trading partner of the EU, its interests being more focussed on the United States. It is hard to see the EU-27 agreeing to free trade for agricultural products unless the UK continued to fully meet their production conditions, set in the CAP. That would be politically unacceptable, so a Canada style deal may not deliver the market freedom the farming industry needs. It would also not solve the border issue here. On that basis the odds for would have to be in or around 30 per cent.
The option which seems to be finding favour now is that the UK remains in the customs union with the EU-27. Despite the political spin that this would be temporary, in reality it would be a continuation of the
status quo and single market. This would be the same as membership of the European Economic Area and the trading relationship would then be similar to Norway. We would be free to trade with the EU-27, but would be outside the CAP and the Common Fisheries Policy. This would cause minimal trade disruption, but would prevent the UK negotiating trade deals with the rest of the world. However, so far as agriculture is concerned, the rest of the world is more interested in supplying food to the UK than buying mainstream agricultural products from us.
The odds on this option have to be around 60 per cent. It will certainly not please everyone, but it may be deliverable if Labour and the Scottish Nationalists vote for it in sufficient numbers to offset the Brexit-sceptic Conservatives. They would only not do so if they wanted to trigger a general election – and that would risk accusations that they made a difficult situation worse. This is all about politics far beyond agriculture. That means those odds for the different outcomes could shift dramatically as politics are played out in the Westminster bubble.
Markets apart, for years agricultural policy has been about reducing income uncertainty. The DEFRA minister, Michael Gove, however told the committee that monitors his department that he could give no assurances on farm support beyond 2022. He said, rightly, that only the Chancellor could give a long term commitment. That means support can no longer be taken for granted, and as time goes on that will be a big difference between the EU-27 and the UK.
The government is making no false promises about maintaining farm incomes or matching the CAP.
Agriculture will have to compete to secure support, and that will be difficult with both major parties at Westminster entirely urban-focussed in the decisions they take.