Friday, 1 April 2022

Admissions, denials and amnesia

It came with a whimper not a bang, but finally this week a government minister – Chancellor Rishi Sunak, no less – admitted at least some of the truth about Brexit. Speaking at a Select Committee hearing this week he, almost casually, said that “it was always inevitable there would be a change in our trading intensity as a result of the change in the trade relationship” [link in quote is my addition, to show latest data on trade intensity].

Yet even as he accepted this fact, he tried to deny it by arguing that it is too early to separate Brexit from other factors, meaning, presumably, the pandemic. Actually, at least as regards trade in goods, it is possible to more or less separate out the Brexit effect, and the Office for Budgetary Responsibility this week re-affirmed it, identifying that overall UK trade volumes are and will continue to be 15% less as a share of GDP than if Brexit had not happened. That in turn means 4% less GDP growth (twice the damage of Covid), 4% less productivity over 15 years, and higher taxes to fund the NHS and other public services than would have been the case but for Brexit.

There’s nothing new in this. These figures have been around for some time and are actually – despite the myth that has developed about the discrediting of economic forecasts – broadly in line with most of the mainstream long-term modelling, going back to 2016, of what hard Brexit (in the meaning of a Free Trade Agreement, rather than ‘no deal’ or single market membership) would do to trade. What has been discredited is the only forecast of positive gains which came – no surprise – from Patrick Minford’s Economists for Free Trade, formerly known as Economists for Brexit.

However, it is new that a minister has admitted, after years of denial from Brexiters, that Brexit means not just ‘teething problems’ of adjustment but permanently disadvantageous structural change to trade with the EU. Even so, what was missing was any acknowledgement of precisely that longstanding denial. For whilst Sunak himself has never been a very vocal Brexiter, though always a committed one, most of his high-profile colleagues categorically dismissed all suggestions that Brexit would be in any way economically damaging as ‘Project Fear’. Again despite the myth that has developed, Brexit was sold to the electorate as something which would be unequivocally economically beneficial to the country.

That was so not just during the referendum campaign but in the years after, when Theresa May repeatedly promised ‘frictionless trade’, when David Davis said there would be the “exact same benefits” as a member of the single market and customs union, and when Boris Johnson proclaimed that he had achieved a ‘cakeist’ trade deal.  None of this is ancient history, and even this week Johnson denied the realities of post-Brexit trade. Yet now we are told, authoritatively if quietly, that damage was “always inevitable” and are apparently expected to forget all that was promised and all that was denied.

Brexit bitterness: a healthy and justified obsession

This matters. Brexit isn’t some passing event. It is a major, ongoing re-set of the entire direction of national strategy, including economic and trade strategy, and the most politically contentious such re-set for at least a generation and, arguably, since the Second World War. Indeed, Brexiters themselves only devoted such energy to it on the basis that it was a fundamental change. In the process, they made promises for which they are accountable and urged a project for which they are responsible.

So it simply won’t wash for them now to complain, as – writing about another aspect of Brexit’s consequences this week – Telegraph columnist Tim Stanley did, that “arch-remainers cannot move on from yesterday’s hurt” and to dismiss concerns about the consequences of Brexit as an “unhealthy obsession”. Nor will it wash, despite the laboured humour of a Lower Sixth Form magazine that Stanley attempts, to deride this supposed obsession by sniggering comparisons with “Morris dancing and incest” and sneering references to “Lord Lucan and the Bermuda Triangle”. The promises Brexiters made are on the record, and can be judged by reference to facts.

And, of course, that’s the reason for the sniggering and sneering. It is a sign of just how comprehensively Brexit has failed. If there were any genuine examples of its success, Brexiters would be delighted to have them discussed. Instead, so bereft of achievements has Brexit been that almost all the successes claimed for it – most notably the early vaccine roll-out – are untrue. Hence there is a mood around, and Stanley actually uses the words, that talking about the failures of Brexit is something that should “be marginalised in polite society”. But this is not some matter of etiquette, in which snooty drawing-room arbiters of taste get to decide what should and shouldn’t be discussed. It is fundamental to any democracy – perhaps to any functioning polity – that the promises made and rationales given for policy are evaluated in the light of what they deliver. Thus to be ‘obsessed’ with this is, in fact, ‘healthy’.

The attempt to dismiss concerns about its consequences as ‘boring’ is as much a part of the dishonesty of Brexit as all the lies told and false promises made to garner voters’ support for it. Tellingly, Brexiters always insist that the time is not right to judge – either because it is too early to know what will happen or, now, as with Sunak, because what has happened as a result of Brexit can’t be disentangled from other things. With claims that it will take up to 100 years (or 47 years as one Brexiter suggested this week) before it can be judged, it’s easy to see that what the Brexiters really want is to avoid any meaningful judgement.

Certainly, more than most, the present government habitually operates on the basis that people should simply ignore any scandals, promises or events – for example the handling of the pandemic, Partygate, or just the endless reviews and inquiries it instigates – dismissing them as old news from the past or punting them into the future. Hence the present is never the moment to be accountable, preventing any accountability at all. This general approach also applies to the government’s handling of Brexit.

However, just because that is what Brexiters and the Brexit government want it does not follow that they will get it. A remarkable feature of Brexit – indicative of both its scale and its folly – is how, despite the relatively little voice they have been given by MPs, erstwhile remainers have not been willing to forget or to be bullied into keeping quiet. Yes, some may have lost interest or become resigned, but many remain galvanized and vocal. That may indeed be a matter of bitterness, for there is much to be bitter about and no shame attaches to that except for those who provoked it. As such, it is likely to be exacerbated if, as Gerhard Schnyder discusses, the Tories seek to frame the next election in terms of its delivery of Brexit (if they do, it will be a risky strategy). At all events, it seems highly unlikely that David Frost’s test for the success of Brexit – that in 10 years’ time, meaning 2031, no one will be questioning Brexit as it was self-evidently the right thing to do – will be met.

The ongoing failures of Brexit

That will not be due to the failure of those who are against Brexit to ‘let go’, it will be because Brexit will continue to fail to deliver its promises. So far as the economics is concerned, the bad news that Sunak has now admitted to is still only the first instalment of the damage. It relates primarily to goods trade, and even on that there is worse to come if full UK import controls get introduced during the course of the year. However, this week there have been reports that yet another delay, the fourth, is in prospect (£), as once again the government finds that Brexit works best when not implemented.

The reason is both lack of preparedness of business supply chains and concerns about the impact on, especially, food prices and availability. In and of itself that makes it sensible to delay – given the baleful effects that even those controls so far introduced are having - but it is also another failure of the Brexit project. More accurately, it is two failures: the introduction of checks shows the damage of Brexit, whilst the failure to do so on time shows inept planning as well as the unnecessarily rushed transition period.

Yet, in ways similar to Sunak, this at least tacit admission of failure is accompanied by a denial, with Jacob Rees-Mogg reported to be pushing the idea that looser import controls are actually an advantage of Brexit. This isn’t a surprise, as he had already hinted at it in an interview last month (£). The same belief is held by David Frost, the architect of the trade agreement, who tweeted this week that not only would a delay be welcome news but that it would be better simply to eschew full controls on a permanent basis.

Rees-Mogg and Frost apparently don’t realise, or care, that this would build in a structural asymmetry whereby British firms exporting to the EU face higher barriers than EU firms exporting to Great Britain. Or to care about the potential scandals, with animal diseases the most likely example, especially if and when British and EU regulatory standards diverge. But, of course, it is just a smokescreen: if what they are now saying was really a good idea, then why were full import controls ever even envisaged? Or, to put it another way, it is a tacit admission of the unworkability of what Frost negotiated – and what Johnson, Rees-Mogg et al. signed up to. But apparently we’re meant to forget that happened.

Then there is services trade, where only now that the pandemic restrictions are easing are we beginning to see more of the implications for the many kinds of services which entail international travel. As with goods trade, it is smaller firms which are being worst affected (£). But, again as with goods, the fact that larger firms may cope doesn’t mean that they don’t incur increased costs, which then impact on competitiveness, prices, taxes paid, or investments foregone. And, trade aside, services industries, especially hospitality, continue to suffer domestically from lack of staff. As with trade, both Covid and Brexit are issues but, as one restaurant chain owner pungently expressed it, “Covid is one thing … with Brexit I am completely screwed”.

Financial services is perhaps the most significant of the UK’s service industries, and this week it was reported that the Brexit-related loss of jobs has so far been less than most predictions, at just over 7,000. Whilst this is a lot less than some predictions at the time of Brexit, it is not actually that much less than the highest estimate of 12,500 jobs made by, specifically, EY (the source of the 7,000 figure), which may well end up being about right. The same report shows relocations of assets from the City to have flattened at about £1.3 trillion – a colossal sum, but, again, less than some forecasts. What isn’t recorded or known is what new jobs and assets might have come to the UK had Brexit not happened. But what is even more to the point is that whilst Brexiters point to damages being less than warned of as vindicating them, it does no such thing. For they claimed Brexit would be positive or, at very worst, not damaging at all.

The ongoing lies and broken promises

It's not only in relation to economics that Brexiters expect the rest of us to forget their promises and lies. When Johnson agreed his revised Withdrawal Agreement with the EU in 2019, the government’s own impact assessment spelt out accurately and in detail its implications, including those of the Northern Ireland Protocol (NIP). Yet, ever since, Brexiters, including Johnson, have either denied or sought to renege on what was in it.

The Brexit Ultra MPs, in particular, have mounted a concerted campaign against it, with the latest example coming, not for the first time, from Iain Duncan Smith (£). They do not acknowledge, and we are supposed to forget, the fact that they campaigned on the NIP as part of Johnson’s wonderful ‘oven ready deal’ in the 2019 election, and then voted for it in parliament. At the same time, they continue to lie about everything to do with the Protocol and often, as in Smith’s most recent article, to tell the specific lie that it “was only ever meant to be a temporary measure”. That’s categorically false. It can be replaced if there is mutual agreement to do so, but there is no requirement to agree such a replacement and in and of itself it is permanent. That is key to what replacing May’s ‘hated backstop’ with a ‘frontstop’ meant, which Brexiters hailed at the time as a triumph.  

Those of them who are in government, such as Northern Ireland Secretary Brandon Lewis, weave even more complex patterns of lies. This week, he claimed at a Select Committee that the grace periods agreed with the EU for the implementation of some aspects of the Protocol were to allow for a negotiated solution to some of the problems it created (specifically, for movement of chilled meats such as sausages between GB and NI). In fact, it was to give supermarkets time to adjust to the new rules, not to change them. Again that is clear from the government documents at the time, and is a prime example of how the Brexiters try to use abstruse detail to gaslight the public into forgetting what happened and why*. For, whilst less brazen than Smith’s false ‘temporary measure’ claim, it has the same character in suggesting that, at least in this limited aspect, the UK has an established right to change the terms of the Protocol.

It currently remains unclear whether, and if so when and how, the row over the UK’s refusal to accept the terms of what it agreed to will flare up again, and whether that will involve the use of Article 16 as Boris Johnson has so long and so frequently threatened. But if it does then, like the unfolding economic damage, it will be a reminder of how, starting with their original denials about the implications of Brexit for Northern Ireland, everything they have said about the Protocol has been proved false. So whilst they admit – indeed denounce – the consequences of the NIP they continue to deny that they, or indeed Brexit itself, had any part in creating them.

Admission-yet-denial

One of the strangest manifestation of the Brexiter ‘admission-yet-denial’ of what they have done is the pages of the Express, perhaps the most ferociously pro-Brexit of all the papers. Here, it is increasingly common to find articles highlighting the damage of Brexit (for example to trade in general, or to specific issues like post-Brexit flight compensation, mobile roaming charges and, as mentioned above, imported animal disease) yet never with any acknowledgement that this is the result of the policy it advocated. Actually, it sometimes seems to me as if Express journalists are trolling their own readers and editors, so great is the gap between many of its Brexit articles, on the one hand, and the headlines above and reader comments below, on the other.

Be that as it may, there’s a more diffuse sense in which Brexiters seem to be bemoaning consequences whilst remaining silent on causes. This week, for example, Foreign Office Minister James Cleverley (who is also Minister for Europe) announced that “a key part of Putin’s plan was to fragment and divide international groupings like NATO” and decries the ‘useful idiots’ who don’t realise this. Fair enough. Yet he apparently doesn’t realise, and certainly doesn’t acknowledge, that another example of such ‘international groupings’ is the EU, and that the Brexit which he supported was also something Putin wanted and gained from.

Or, to take a different kind of example, Robert Colvile, co-author of the 2019 Tory manifesto, bemoaned the flatlining of the UK economy (£), in an analysis enthusiastically endorsed by Nick Timothy, co-author of the 2017 Tory manifesto. Yet neither man seems to have any sense that the things they endorsed (including though not confined to Brexit, which Colvile only mentions in passing), whether in those manifestos or more generally, might have anything whatsoever to do with Britain’s economic woes.

Undoubtedly the weirdest example is that of the peculiar former Brexit Party MEP Ben Habib. Despite having voted for the Withdrawal Agreement, including the NIP, in the European Parliament, he has since been vocal in opposition to the Protocol and is one of the litigants in the case that keeps failing to have it declared illegal. One might wonder how such a level of cognitive dissonance could be sustained and this week there was an answer of sorts, when it emerged that the hapless Habib appears to believe that “we didn’t leave” the EU. Therefore, he argues, he “can’t regret Brexit until we’ve actually got it”.

The grotesque idea of Brexit amnesia

Back to the real world, and to Sunak’s admission, at once unequivocal about the ‘inevitability’ of the damage of Brexit and slippery in accepting the degree of that damage. What’s remarkable about it, apart from being the first a government minister has made, is how shameless it is. This is a Chancellor of the Exchequer talking as if it is some minor matter that he supported a policy that has poleaxed British trade, with no sense of contrition or remorse. It exemplifies the way that Brexiters seem to imagine they can just shrug and move on, and that everyone else should join them.

Such an amnesia is a grotesque idea even in relation to the economic damage of Brexit, and an obscene one for the families whose lives have been ripped up by loss of freedom of movement of people, as the In Limbo project continues to attest. But, almost worse than that, it’s spectacularly na├»ve. Did they really think that they could punch the nation – leave and remain voters alike - in the face and then walk away grinning? Did they really think that everyone else would just forgive and forget?

In January 2020, with Johnson’s Withdrawal Agreement in place and him calling for the nation to unite and get behind the approaching leaving date, I wrote that we would now see a prolonged battle between ‘remembering and forgetting’. Much as Brexiters would like the rest of us to forget what they have done, and forget the promises and lies they made along the way, that battle is still ongoing. It may never be resolved, and there’s certainly no sign of it ending.

 

*On the subject of abstruse detail, those following the link given will find it refers to a “unilateral” declaration by the UK, and perhaps wonder why I refer to it as an “agreed” grace period. But – unlike subsequent ‘unilateral’ extensions which the EU did not agree and which are the subject of a currently suspended legal action by the EU – the initial grace period in question had the de facto agreement of the EU even though, formally, it was a UK initiative.

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