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Wednesday 6 March 2019

The government will slash 80-90% of tariffs in the event of No Deal, report Sky News. As contingency planning has stepped up over recent weeks, the farming lobby has pushed for protection from low cost imports. The remaining 10-20% has been reserved to meet those concerns. Note, under No Deal, the government has pledged to continue agricultural subsidies, but the sector is still concerned by more competitive produce flooding in from Africa and North America without tariff barriers.

A unilateral abolition of import duties is a wise move. In one fell swoop, it removes the fears stoked by the Remain side about manufacturing components brought in from the EU suddenly carrying duties leading to spiralling costs, pinching thin margins.

More significantly, “normalized” tariffs on imports from outside the EU, which account for the majority, will lead to plunging retail and commercial prices, adding stimulus to the economy just at the point when we’re told everything is going to tank.

Bear in mind that leaving the EU on WTO terms will not take Britain into recession, says the National Institute of Economic and Social Research, at a time when Italy is already in a depression, soon to be joined by the Continent’s other heavy hitters – France is the exception, having implemented Trump-style stimulus, although that’s not the way the media spin it.

In less reassuring news, business secretary Greg Clark took to the airwaves this morning to outline how the government plans to remain (key word there for you) in line with EU employment regulations, a key condition of Labour MPs considering a vote for Theresa May’s virtually unchanged deal next week.

Speaking on the Today programme, Clark outlined a ludicrous system whereby Parliament would be given an initial vote on whether to stay aligned with EU rules. As those regulations are amended in Brussels and replaced altogether over the coming years, MPs will be given additional votes on whether to re-adopt them. Apart from betraying the referendum (yet again), the whole concept is extremely messy, giving employers and investors an unpredictable picture of what kind of regulatory framework they are dealing with.

Clark’s proposal underlines perfectly why the government need to push ahead with a Canada-style agreement, balancing out a higher level of access to the EU market with maximum sovereignty, British rules for British workers, devised by British policymakers.

Unsurprisingly, John Mann, the MP who has negotiated regulatory concessions from the government in return for Labour backbenchers’ support of the deal, has described the move as a “huge step forward” to the Times.

Mr Mann stands alone on the left. The government has promised an “enhanced role” for trade unions. Nevertheless, union reaction has been hostile. TUC boss Frances O’Grady, who helped Mann in brokering the arrangement, described it as “blatant window dressing”.

“history will not be kind” to Labour MPs who voted for the Brexit deal based on the “nods and winks from a lame duck prime minister”, said Tim Roache, general secretary of the GMB in a reference to Jeremy Corbyn’s strategy of not formally backing May’s deal, while willing her to succeed by getting backbenchers to score a left-wing concession in collusion with the government.

But the most depressing revelation from the past 24 hours is a leaked briefing containing a disastrous warning by Julian Smith.

In the chief whip’s opinion: “If the vote does not go through next week, that means delay and a customs union.” The logic is simple, Mrs May has handed de facto control over withdrawal from the EU to Parliament. Indicative votes are inevitable. The easiest majority is for Britain to remain in the Customs Union (don’t rule out not leaving at all though). Note also that the House of Lords has added a CU crossbench amendment to the Trade Bill.

As No Deal becomes an ever more mouthwatering prospect, its likelihood diminishes by the day. Tragic.