Friday, 27 August 2021

Post-Brexit Britain can't be realistic until it's truthful

In recent posts I’ve been using the analogy of a slow puncture for the damage caused by Brexit with the political consequences being muffled as a result. An excellent piece by Rafael Behr this week makes an essentially similar argument: “Brexit is an unspectacular failure” and this precludes “a realistic conversation about the relationship that Britain should have with the rest of Europe”.

However, several people have pointed out that a slow puncture eventually leads to a flat tyre which can’t be ignored. We’re not at that point yet, but there are glimmers of a realization that there is a serious problem and, just in the last week or so, these glimmers have been growing. Even if so, it’s coming far too slowly, especially given the still more serious problems which lie ahead. In particular, for all that a little more realism about Brexit may be emerging, there is still insufficient truthfulness about it.

The reality of supply chain disruptions

Like many others, I am increasingly noticing failures in food supplies. My local supermarket has many gaps on the shelves and has signs and announcements apologizing for ‘current supply difficulties’. My milkman (yes, they still exist) has not delivered anything for a week, citing the same reason. Such personal experience probably has more impact on the public than media images of empty shelves and stories of shortages, with McDonald’s running out of milkshakes being this week’s highest profile example. Shortages in food supplies are the most visible, and potentially most politically important because they impact on people’s daily lives, but there are similar problems across the board (£), perhaps most importantly in the construction industry.

As the cliché has it, the plural of anecdote is not data, and it is very hard to pin down exactly how extensive and serious these problems are. But the latest PMI (Purchasing Managers’ Index) survey released this week shows “the number of companies reporting that output had fallen due to staff or materials shortages has risen far above anything ever seen previously in more than 20 years of survey history”. Meanwhile the Chief Executive of the Co-op Group says (£) that “shortages are at a worse level than at any time” he has seen, and there has been a dramatic fall this year in levels of stock held by UK firms which have reached a record low.

We also know that the Road Haulage Association estimates that the UK is in need of up to 100,000 HGV drivers, which is one of the key causes of the supply difficulties. This in turn is part of a wider shortage of labour in all parts of the economy, from farming through to retail and hospitality, as well as in social care and many other sectors. Overall, it doesn’t seem hyperbolic to say that there is now a supply crisis which is likely to worsen, and if that were to lead to widespread panic buying that could lead to a political crisis.

Equally, it is difficult to separate out Brexit from other causes, especially the pandemic, and some of the current supply problems are unquestionably global. But we can say with certainty that Brexit is one of these causes, that some companies and trade bodies say that for them it is the main cause, and that where supply problems are to do with post-Brexit trade barriers with the EU they are, by definition, entirely caused by Brexit. That the exact extent of the role played by Brexit in some of this is hard to determine offers Brexiters a chance to downplay it, as in the case of the HGV driver shortage, but doing so misses the key point: whilst, along with other countries, the UK faces supply chain problems beyond its control, the UK, uniquely, has chosen to add to them.

It’s official: this is what we chose

As regards the HGV driver shortage specifically, the government response is instructive. Back in June ministers dismissed industry concerns as “crying wolf”, implying it was all more Project Fear. Now that the realities are undeniable and facing calls to grant temporary work visas for EU drivers, a spokesperson said:

“The British people repeatedly voted to end free movement and take back control of our immigration system and employers should invest in our domestic workforce instead of relying on labour from abroad.”

So the government itself is explicitly tying driver, and hence in part supply, shortages to the delivery of Brexit: it is, so to speak, ‘the will of the people’. Yet it is an odd statement. For one thing, there has never been a vote on the issue of free movement, per se. Moreover, the government are not being asked to re-instate freedom of movement but, precisely, to exert control over the immigration system. Control does not necessarily mean restriction.

This goes to the heart of one of the inherent contradictions within Brexit, but glossed over by Brexiters. Many ‘globalist’ Brexiters claimed (usually after the referendum) that a key advantage of leaving the EU would be the freedom to design an immigration system in line with British needs, rather than to end immigration. For them, overall immigration might even increase after Brexit. Other, more ‘nativist’, Brexiters did indeed see it, and sell it to voters, as a way of reducing immigration across the board.

Apparently, the latter view holds sway with the government, although a U-turn is perfectly possible and even likely. But it is based, as the statement shows, on the idea that domestic labour can be a substitute (just as, more widely, Brexiters like John Redwood think that domestic production can substitute for imports). As such, it is a fantasy because of the UK’s ageing population and because prior to Brexit there was arguably full employment, or something close to it (depending on definition).

HGV drivers could be paid more, but if that solved the problem in one part of the labour market it would displace it to another. Or all workers could be paid more, though their gains would arguably then be eaten up by inflation as workers are also consumers. But this won’t solve the overall domestic labour shortage. Training could change the skill profile of the domestic workforce, but won’t increase its size. Pensioners won’t, and for the most part couldn’t, harvest the crops. And the limitations of the idea that the unemployed can shift to significantly meet labour needs are tacitly acknowledged by the latest attempt to fill the gaps by using prisoners on day release (£). Increased mechanization may be a partial solution in some sectors, but is currently of limited use for, say, HGV drivers or social care. Not for the first time in history, Britain needs immigration for economic reasons alone.

Freedom of movement of people was actually a very efficient and flexible way of addressing this, as well as having all sorts of other, non-economic, benefits. For that matter, it can’t be assumed that if the government did introduce temporary visas for EU drivers they would flock to come to work here. The hostility EU workers have experienced, the fall of the value of the pound since the referendum, the changing economic situation of many EU countries, the miserable treatment of EU truck drivers in the UK and many other reasons might mitigate against that.

Choices have consequences

With all that said, the government’s (current) stance on HGV drivers is an important one in that it asserts and acknowledges that some of what is happening is a matter of the collective choices made by the UK: by the vote to leave the EU and the way that the Brexit government has interpreted that vote. And although I can’t be sure, my impression is that even in the last week there has been a growing willingness in media reports to link labour and supply shortages to Brexit. For example, the Mail report on using prisoners to fill labour shortages named both Brexit and the pandemic in the headline.

Against that, many reports in the pro-Brexit press continue to be in denial. A peculiar piece in the Mail on Sunday claimed to have undertaken an “investigation” that enabled it to “reveal” extensive and costly barriers to trade since the end of the transition period. That is hardly the triumph of investigative journalism it purported to be, but more importantly nowhere was it acknowledged that these things are a consequence of the UK’s choice to undertake hard Brexit, and the headline reference to “the EU border blockade” implied, as usual, that something unfair or punitive had been done to the UK by the EU. Similarly, the Express this week, also reporting on the barriers facing exporters to the EU, identified the need for “urgent talks” to reduce the checks that were being “forced” on British firms by the EU, as if these checks were not the result of the form of Brexit the UK chose and the Express itself vociferously supported.

Again this goes deep into the Brexit process, in several ways. First, it reflects the refusal to understand or to admit that Brexit would have costs, and that the harder the Brexit the higher the costs. So when these were warned of it was dismissed as Project Fear, and as they emerge they are ascribed to EU punishment. For that matter, even now Brexiters seem unable to decide whether talk of Brexit damage to trade is a remainer invention or, as in the two reports just discussed, an EU plot. Secondly, and more deeply, it continues the longstanding pattern whereby Brexiters behave as if Britain had been forced to leave the EU rather than choosing to do so. It is the failure to be honest about the choices Brexit entailed which remains crucial.

It’s important to understand why this matters so much. An illuminating report by Sarah O’Connor in the FT this week (£) discusses the truck driver shortages, and the many issues that lie behind that and other labour shortages, and argues that “to use them to bicker about Brexit” or to suggest that “everything was fine without [Brexit]” is to miss their complexity. That’s reasonable enough in itself, but it doesn’t mean that their relationship to Brexit can be ignored. Until there is a widespread honesty about what having chosen Brexit means – as well, certainly, as what it doesn’t mean - we are stuck in the same old loops of Brexiter denial and obfuscation.

For particular example, what kind of ‘re-negotiation’ with the EU is envisaged in these ‘urgent talks’ in order to remove the border checks? It is totally pointless to disinter the old lies about how the UK can be outside the single market and customs union and yet treated the same as if it were not. We can’t, as a country, be realistic about Brexit until we start being truthful about Brexit.

Truthfulness is more than realism

In my previous post, I suggested that, under the radar, there are a few signs of realism, and this week has seen a further, and very important, example. The government has announced it will postpone the requirement for goods sold in the UK to carry the UKCA mark, and therefore extend the validity of the CE mark in the UK, from January 2022 until January 2023. This issue (again, discussed in more detail in an earlier post) epitomises many of the Brexit debates in that it imposes extra costs on firms, whether British or not, wanting to sell their goods here. But it does so for very little substantive reason since for the most part product standards remain unchanged, so its only justification is a purely theoretical idea of sovereignty (£). It is also an example of how the government seriously underestimated the complexity of what it and businesses would have to do and how long it would take.

So it’s sensible to postpone. But it would be even more sensible to recognize its pointlessness. We might as well postpone indefinitely and, if we did, absolutely nothing bad would happen. And if we recognized that, then, in the end, the same thing could be said of the pointlessness of not trying (it wouldn’t be easy or automatic or quick) to re-enter the single market via EFTA or, at the very least, to have as close a relationship as possible with it, rather than stick to the sovereignty-first approach that led to the Trade and Cooperation Agreement. That would mean, for example, accepting the EU offer of dynamic alignment on sanitary and phyto-sanitary regulations, which as well as resolving many of the Northern Ireland Protocol (NIP) issues would ease border frictions all round. It would also mean dropping the latest fantasies of data protection divergence (£).

From this point of view, whilst it is indeed sensible to postpone UKCA, we shouldn’t feel any ‘gratitude’ to the government for doing so (though businesses affected will feel relief). It’s actually all of a piece with what has happened with Brexit from the very beginning: Brexiters in and outside government have refused to accept reality until the point that it becomes impossible to do otherwise. Then, they either accept it with bad grace (the financial settlement of the Withdrawal Agreement being an example) or postpone the difficulties if they can (as in this UKCA case, or the Northern Ireland grace periods). What is lacking is any truthfulness about why reality keeps trumping the promises and plans of the Brexiters.

In this sense, there is a realism but no honesty in quietly postponing UKCA. The government is avoiding adding to the already visible supply chain disruptions (because, literally, no goods requiring such marking would have been legal in the UK from January without it). Since, to most, it’s an arcane technical issue they’ve never heard of, this postponement also avoids political discussion of Johnson’s approach to Brexit. So it slows the puncture. The same applies if there is a reversal of the policy on HGV driver visas.

It’s not hard, now, to imagine a further postponement to the introduction of import controls that are due to start on 1 October, for exactly the same reasons, but again without any honest acknowledgement of the failure to tell the truth of what hard Brexit meant for borders from the outset, and consequently to prepare for it in time. If so, unlike UKCA postponement, it will carry risks because in leaving the border relatively unchecked the risk of smuggled or even dangerous goods entering the UK market grows.

Post-Brexit Britain needs a new truthfulness - urgently

In short, it simply isn’t enough for the realism to be quiet and under the radar, especially whilst – as is likely to resume shortly – engaging in the antagonistic posturing over the NIP that precludes close and harmonious relations with the EU. What’s needed is an open public and political debate not so much about Brexit, though that is part of it, but about Britain’s post-Brexit future and relationship with the EU. That isn’t, and can’t be, a re-hash of the 2016 referendum, as it can’t be conducted in the terms of the now dead question of EU membership, and so it mustn’t be conducted in terms framed by the Brexiters which, by definition, arise from that dead question.

This is highly unlikely to happen, but it’s just possible it might be provoked if not by the supply chain crisis then by geo-politics. That is, the shock of the Afghanistan pull-out (£) could be the spur to the government realising that it needs to rebuild its relationship with the EU - a sharp puncture to the vanity of Brexit, so to speak. (See also the ‘noisy fantasy’ section of my post last week.)

It certainly seems likely to hasten the EU’s already growing drive for ‘strategic autonomy’ which will, in turn, create new pressures upon the UK to work with rather than independently of, or even against, the EU. This is partly about security and defence issues, but also the wider set of ways in which the EU might develop a greater degree of – oh, the irony – sovereignty. These encompass emergent ideas about EU technological sovereignty and the closely related initiatives to secure sustainable access to ‘critical raw materials’, including the European Raw Material Alliance which was established late last year. This has recently led, for example, to a strategic partnership between the EU and Ukraine over such raw materials, which include the rare chemical elements and minerals needed for new battery technologies and other key, especially green, industries of the future.

The UK has a similar interest – mainly driven by a need to diversify from reliance on Chinese suppliers – and might benefit from involvement in such developments. The same applies to ongoing developments in both EU and UK hydrogen strategy. But any such involvement can’t currently be separated from the omnipresent issue of the NIP disputes and all the other spats, or the constant whining about the EU punishing the UK for its own choices. In turn, it can’t be separated from over-arching issues of Brexiter hubris about ‘Global Britain’ and sovereignty, and visceral hostility to the EU and fantasies of its imminent collapse or, alternatively, its overweening potency. That is all dead wood which needs, very urgently, to be discarded.

These are enormous issues, encompassing the climate crisis, the economy, war, peace and diplomacy - and they are all intertwined. So, as with Brexit, Britain has choices and those choices have consequences. The refusal or inability of the current government, and the pro-Brexit media, to engage seriously with them, which necessarily includes engaging seriously with the EU, instead of an imaginary independence and a fantasy of its global role is shaping up to be a massive strategic failure. It isn’t automatically entailed by Brexit, but it is an outgrowth of applying Brexiter logic to the post-Brexit world. More precisely it is an outgrowth of the dishonesty of that logic, of the lack of truthfulness which precludes realism.

Empty shelves in the shops are only the first payment of the costs for that lack of truthfulness.

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