Boris Johnson’s Brexit deal isn’t just about his own agenda, but also that of his powerful backers

It is one thing to make vague or withdrawable promises for the sake of getting a deal or a bill through parliament when the numbers are tight, but that is not a long-term strategy

The deal would satisfy no one (EPA)

It seems longer, but it was only two months ago when, at the G7 in Biarritz, Boris Johnson pledged a “fantastic deal” with Donald Trump’s USA “once we clear up some of the obstacles in our path”.

Trump, for his part, foresaw “lots of fantastic mini-deals”. Back in 2017, with Liam Fox (remember?) as secretary of state for international trade, a joint working party was set up which is “laying the groundwork for a potential, future free trade agreement once the UK has left the EU”, as the Office of the US Trade Representative summarises it.

In the past few weeks, the “fantastic deal” with the US has hardly been mentioned, while the “new deal” with the EU takes centre-stage.

But what then is Johnson’s real post-short-term Brexit agenda? And, more pertinently, what is the post-Brexit agenda of those who have backed him to date – namely the powerful financial corporate members of the Eurosceptic think tank Open Europe?

Johnson spent (or wasted) most of the summer playing games of prorogation and fantasy Queen’s speeches, and expulsions of his own party’s long-time MPs. He had certainly sounded like a committed no-dealer, an impression reinforced by the absence of serious new proposals. Then came that magical walk in the park with Irish prime minister Leo Varadkar and a potential deal suddenly emerged – in large part because Johnson conceded that there would have to be a form of customs border in the Irish Sea.

So where does this leave us?

On the one hand, there are serious-sounding words about maintaining “environmental, social and employment standards at the current high levels provided by the existing common standards”.

The withdrawal agreement (the legally binding text) also commits the parties to try, in good faith, to “negotiate expeditiously the agreements governing their future relationship referred to in the political declaration”. So on the face of it, the government agrees to try to negotiate terms in any future free trade agreement that at least maintain existing high standards and a “level playing field” in regulation. But trying to negotiate is not the same as actually negotiating – we have to wait and see.

On the other hand, Johnson’s latest EU (Withdrawal Agreement) Bill gives us a clue as to his true (content-lite) intent.

There is a long section on “workers’ rights” which includes requirements on ministers to make statements of “non-divergence” from EU rights or, where divergence is proposed, “a statement to the effect that the secretary of state is unable to make a statement of non-divergence”.

The other main change is the deletion of the commitment to “build and improve on the single customs territory” then provided for in the withdrawal agreement. There will (if it can be negotiated) be a free trade agreement that simply seeks “ambitious customs arrangements”, whatever they may turn out to be. This could mean absolutely anything – or nothing – but is presumably seeking to follow broadly the lines of the recent EU-Canada free trade agreement. This eliminates most tariffs on goods, but requires checks and other “barriers” in place, as standards are not harmonised.

It is one thing to make vague or withdrawable promises for the sake of getting a deal or a bill through parliament when the numbers are tight, but that is not a long-term strategy. It would not satisfy Brexiteers.

Even more to the point, it seems it would not satisfy the Tory party’s powerful business backers. Their interests lie in the United States or the “rest of the world” and, for them, surely the whole purpose of Brexit is to deregulate and slash standards. Open Europe lists many of the UK’s major corporations among its “supporters”, including big names from the international finance sector (HSBC, JPMorgan, Hambros).

At the very start of the Brexit referendum process, in 2015, OE published a report called “What if...? The consequences, challenges and opportunities facing Britain outside EU”.

It concluded that leaving the EU is likely to lead to the UK being very modestly worse off. However, with a major programme of deregulation, that could be reversed.

Open Europe put forward a highly controversial “best case scenario”, in which the UK undertakes a programme of “very ambitious deregulation of its economy”. While all other forms of Brexit would leave the economy worse off, it argued that the UK would be somewhat better off. However, the programme to achieve this would require the outright scrapping of a substantial number of what OE called “politically sensitive regulations”. The biggest obstacle to the think tank’s ambitious deregulation drive was likely to be “domestic politics”: a major governmental change of heart would be required on matters such as climate change and consumer protection.

Their report set out the target areas. First target, protection of workers with “additional savings achieved by cutting the cost of EU-derived health and safety legislation”.

Second target, the environment and climate change: “The EU’s environmental and climate change laws come with a substantial cost to the UK economy and this is arguably the area in which a post-Brexit UK government could make the greatest savings ... Under the extremely liberal scenario, we envisage that the UK would go even further and scrap climate change laws entirely, saving £8.5bn.”

Other targets included financial regulation, consumer protection, product standards.

At the time, OE saw that their “best case” might not be politically wholly feasible. But were a Conservative government to be returned at the next election, following the recent purges it will surely be well to the right of any we have seen since 1945. What would then be seen as “politically feasible” may be very different in a year’s time.

So while Labour Leave-voting MPs listen to Johnson’s emollient promises about his kindly intentions (he told Labour MP Tracy Brabin “there can be no regression” on workers’ rights), we should recall the strength of those lobbies for whom the very purpose of Brexit is to strip away, not entrench, rights and protections in the name of competition and a globalised economy.

Ann Pettifor is the director of Policy Research in Macroeconomics (Prime) and author of ‘The Case for the Green New Deal’