Friday, 26 March 2021

Almost quiet on the Brexit front

This will be a slightly shorter post than usual. That’s partly because this week I’ve been working on the proofs of my forthcoming book, Brexit Unfolded. How no one got what they wanted (and why they were never going to). Yes, that is a shameless plug – it will be published by Biteback in June and can be pre-ordered now.

But, more to the point, it has been a fairly quiet week for Brexit news, perhaps the quietest since the end of the transition. To the extent that much has happened it does not really require new analysis. There were some truly horrific figures produced by the Food and Drink Federation, based on HMRC data, showed a massive collapse in that sector’s exports to the EU. The year-on-year fall between January 2020 and January 2021 was 75.5%. That is not all attributable to Brexit (coronavirus being an obvious factor) but the fact that in the same period exports to non-EU countries dropped by just 11.1% suggests Brexit played a major role.

Exports to the EU of some products fell by colossal amounts, including salmon (98%), beef (92%) and cheese (85%). Former Brexit Party MEP Lance Forman, himself in the fish business, has claimed that the data, at least as regards salmon, are flawed, though offers no verifiable evidence for this. Be that as it may (or not), a House of Lords Committee report on post-Brexit trade in goods published this week identified significant new “structural barriers” to trade, and its parallel report on services trade tells the same story. Both are based on extensive evidence. Despite the attempts of Forman and others to revive it, the ‘Project Fear’ rebuttal is now effectively dead.  

There is no real surprise in this news, certainly not to anyone who has had experience of, or who has read about, what has been happening to export businesses over the last three months, as the posts on this blog have documented. So although it is important to continue to amass evidence of what Brexiters have done to our country there is little new that can be said about it beyond recording it. The ‘Kelemen archive’ continues to do just that (as usual when I refer to this, the link is to the entry at the time of my last blog post, in this case #306, so scroll down the twitter thread to see the most recent damage, and scroll up for the back catalogue).

Changing the post-Brexit narrative

What is more surprising is that there’s still no sign of the Brexiters, or Johnson specifically, paying any political price for the failure of their project. The general public seem largely unaware of, or uninterested in, the impact Brexit is having. That is partly because of coronavirus, obviously. But also perhaps they have already discounted it, or ascribed it to the EU, or decided that it is ‘just one of those things’. It may also reflect a view that Brexit, for good or ill, is in the past. If so, what becomes politically important is the nature of post-Brexit policy.

In a typically pellucid blog post last week, David Allen Green, the eminent law and policy commentator, pointed out – partly responding to my previous post about David Frost – that there exists a political vacuum in which no post-Brexit policy other than that of Frost and Johnson is on offer. Realistically, at least in England, that can only come from the Labour Party – not, of course, that as the opposition it could implement any such policy, but because it is best-placed to provide an alternative to the otherwise unchallenged narrative.

It’s true that some senior Labour politicians, notably the Shadow International Trade Secretary Emily Thornberry, have recently been raising important questions about the TCA and its effects, and Harriet Harman, from the backbenches, has suggested measures to ease restrictions on touring musicians. But Keir Starmer is not leading on it. Bobby McDonagh, the former Irish diplomat, has written a closely argued analysis and critique of Labour’s stance. Amongst his other points is that the longer the silence goes on, the more complicit Labour will become in the Brexit damage.

That complicity already exists by virtue of Labour having voted for the TCA but even so, as I have argued before, there is a ready-made, potent line of attack for Labour in denouncing not Brexit but what Johnson has delivered as a betrayal of Brexit. Obviously the Brexiters would seek to twist that to being an anti-Brexit stance, but all political parties have to accept that their opponents will attack them. If politics was completely bi-partisan it would no longer be politics. At the moment, as Robert Shrimsley argued in a perceptive article this week (£), Starmer’s Labour is fearful of taking a stance over a range of issues which include Brexit or flow from it

The point of critique would be Johnson’s dishonesty and incompetence rather than Brexit itself. But critique would not be enough. Labour also needs to articulate how, given where we are now, it would develop a different approach. That could include concrete ways in which the TCA could be built upon, for example in terms of a mobility chapter to assist service industries, and entering into a sanitary and phyto-sanitary and a veterinary agreement with the EU to assist food and agriculture industries.

More intangibly, Labour could make proposals to improve the tone of relations. These could include diplomatic recognition of the EU Ambassador and a re-commitment to working within, rather than in violation of, the Withdrawal Agreement and NIP. Apart from any short-term tactical advantages, if Labour are serious about forming the next government a significant strategic challenge will be the normalisation of UK-EU relations.

Behind the vaccines smokescreen

As regards those relations, what have of course been in the news extensively this week are the vaccine rows. For reasons I’ve argued before, I think it is bogus to view those rows through the prism of Brexit, an argument made cogently by Ruadhán Mac Cormaic in the Irish Times last weekend. The vaccines issues don’t provide an acid test for Brexit. Nor should EU statements about a possible export ban be read as a commentary on, or reaction to, Brexit, rather than as a reflection of the internal politics of the EU. After all, India’s announcement this week of an export ban (£) will affect the shipment of some 5 million doses to the UK, yet no one is interpreting that as indicative of India’s envy or resentment of the UK.

When not making opportunistic claims about the vaccination programme to justify what they have done, the other Brexiter defence of the extraordinary damage that is being done to trade is to say that it will lead to import substitution, with more goods being produced and sold within the UK. They are right to think that to some extent this will occur, and probably already is, although they are wrong to think that, especially as regards foodstuffs, it can be done without increases in the prices of some goods, shortages of others, and lack of the choice that British consumers have come to take for granted. And whilst surveys have shown that almost a quarter of these consumers say that Brexit has made them more likely to buy British food, that is very price dependent.

The import substitution argument is an ironic one in terms of the idea of ‘Global Britain’, and it is strange to see erstwhile free-market Thatcherites like John Redwood now embracing the long thought obsolete idea of economic autarky. But it derives from one of the longstanding and paradoxical dynamics of Brexit, that between Brexit as a nationalist and protectionist project and as a globalist free market project.

Many leave voters were persuaded on nationalist grounds, most obviously immigration, but the idea of local, British companies having been lost, and decisions about jobs being made in far off boardrooms was lurking in the background and could often be found on social media and vox pops. Theresa May’s 2016 conference speech reference to ‘citizens of nowhere’ was taken as a dig at cosmopolitans and perhaps especially remainers, but read in context it is also clearly to do with the links that she argued should exist between businesses and communities and that Brexit offered the chance of a re-set.

Selling-off control

In that context, the recent report of a massive new round of sell-offs of British firms to overseas owners (£) hardly seems to suggest the ‘taking back control’ that was promised. No doubt Brexiters will spin this as a sign of foreign investors having confidence in Brexit Britain, but the report makes it clear that what is happening is a cut-price sell off which has occurred since the end of the transition period and is due to Brexit (and the pandemic, but the correlation with the end of transition suggests that Brexit is the bigger factor) causing British companies to be under-valued.

Of course it was always nonsense that EU membership was the cause of the UK’s particularly lax approach to foreign ownership of its businesses. That was a choice of successive British governments, going back to the first Thatcher administration in 1979, which followed a very different path to, say, France or Germany. Despite some recently proposed reforms, mainly related to security concerns, this relative laxity continues, and Brexit has created even greater opportunities for global takeovers of British firms. Again this could be fertile territory for Labour, perhaps especially in the red wall seats.

So whilst Brexit, to the extent it is in the news at all at the moment, is being discussed almost solely through the lens of the vaccination roll-out and the possibility of an EU vaccine export ban it’s important not to lose focus on the more fundamental roll-out of Brexit effects. I suspect that within a few months the vaccine issue will have been largely forgotten and, certainly, that it will not in the long-term be the way Brexit is evaluated.

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