Brexit's last chance saloon lock-in

That, inevitably, could all go wrong if Boris Johnson again throws his toys out of the pram, but that is now less likely than a few days ago.

It seems there has been an outbreak of economic common sense and logic within the Conservative party. Johnson, no stranger to infidelity and divorce, is finally contemplating an amicable end to a long term relationship with those he refers to as 'our European friends'. That would be good news for agriculture and the rest of the UK economy. Indeed it is hard to see it being bad news for anyone other than slash and burn Brexiteers, many of whom are less bullish now it is their jobs on the line in the perfect storm of Brexit and Covid.

It is difficult to tell what changed to bring momentum back into the talks. Unlike most negotiations in Brussels they are fairly leak proof – mainly because they involve officials rather than politicians. With a deal in the balance we know most of the issues have been resolved or are capable of resolution. But the question remains what has changed since both sides stood on a precipice of admitting defeat last Sunday?

Neither clearly liked the prospect of what lay ahead with no deal. Johnson, perhaps, thought about how history would judge a prime minister prepared to allow a deal to fail to protect fishing as a totemic industry that reportedly employs fewer people than Poundland.

All those factors are in play, but the light bulb moment for Johnson was perhaps when he saw through his own bluster. There never was an 'oven-ready' deal on terms he would accept. He believed he could convince the European Commission and EU heads of state to back down, but found this impossible. Above all he suffered from a conviction that the EU would give up its single market principles to protect markets in the UK, with German cars often cited as an example. Last weekend Johnson must have realised this game was run. The EU sees its single market and world standing as much more important than short term trade with the UK.

With 500 million citizens the EU is a global power; the single market is the world's biggest trading bloc and a fortress against imports.

Throughout the debate, Johnson talked about the UK trading with the EU on 'Australia terms', which is his code for World Trade Organisation tariffs. What he seemed to forget is that Australia and indeed New Zealand are both negotiating as hard as they can to get away from those tariffs and onto a free trade based deal. This underlines the problems the UK would face. No sooner would it start trading on WTO terms than it would have to follow others into trying to seek a free trade deal with the EU-27. This would be a lot harder than what is happening now. It would be on a commodity by commodity basis. It is a salutary thought that the EU has been negotiating for 20 years with the Mercosur countries in South America, with a final deal still elusive.

The UK is a relatively sound global economy, but it is over-concentrated on the retail and services sectors at the expense of manufacturing. It has technical expertise to sell, but many of the markets for this expertise and indeed financial services are in the EU-27. Ultimately Britain's problem is lack of scale. In the global trade game 60 million consumers simply is not an attractive market compared to many others. If push comes to shove and countries have to choose between progressing deals with the UK or EU, the latter will win out because it offers a market of almost 500 million people.

Those are the thoughts that will have kept Johnson awake when he was looking over the cliff edge at the prospect of a no deal Brexit. It could yet happen. If it does it will be a failure of statecraft on a scale not seen since the late 1700s, when the then prime minister, Lord North, was condemned in history as the man whose belligerence lost Britain the American colonies.