Friday 19 May 2023

Brexit has failed, but there’s no solution in prospect

It’s not at all surprising that so many leading Brexiters, especially those not in government office, now pronounce, as Nigel Farage did this week, that “Brexit has failed” (though it is possible he was interrupted and intended to qualify that bald statement along the usual lines of ‘because it hasn’t been done properly’). It was always embedded in Brexit that this would happen, through a combination of the impossible promises made for it and the addiction to betrayalism and victimhood of so many of its advocates. Indeed, that has been a recurring theme of this blog, and of my book about Brexit.

The rumblings that Brexit has been betrayed, or is Brexit in Name Only, started even before the UK left the EU. But they began to grow more clamorous afterwards and there came a point, which seemed to occur around the time of Spectator Editor Fraser Nelson’s Telegraph column in November 2021 (£), after which it became a common complaint. Now, amongst Brexiters, it’s not even so much a complaint as an uncontentious statement of fact. Farage’s comment wasn’t shocking. Something similar is said day in and day out by Brexiters. For example, also this week, Telegraph columnist Sherelle Jacobs wrote (£), not as the argument of her article but as the taken-for-granted first sentence of it, that “Brexit is dead in all but name.” There are any number of other examples.

Labour can now say the B-word but still not the F-word

No, none of that is surprising. What is surprising is that those who opposed Brexit, especially in the Labour Party, are so shy of saying the same thing. Keir Starmer’s policy of ‘Making Brexit Work’ implicitly acknowledges that Brexit has not been a success, but it is surely bizarre that it is taboo for him or any other Labour frontbencher to say in terms what to so many Brexiters is no more than self-evidently true. Brexit has failed.

Of course, what Brexiters like Farage mean by Brexit having failed is quite different to what Starmer means when he says it needs to be made to work. Starmer’s idea, which now seems little different to Rishi Sunak’s, is to rub some of the harder edges off the Brexit that Boris Johnson and David Frost negotiated, but without changing the fundamental nature of it. For Farage and others, by contrast, the issues are the continuing high level of net migration and the absence of significant regulatory divergence from the EU.

Labour’s policy was re-iterated by Starmer this week, when he committed to “improving” the Brexit trade deal whilst ruling out seeking to re-join either the single market or the EU, and there seems almost no chance of it changing before the next election. Their continuing lead in opinion polls and the results of the recent local elections will be taken to vindicate it, and, anyway, arguably it is the only realistic policy open to them in their first term of office.

Clearly Labour are also wary of allowing the Tories once more to weaponize Brexit against them, as happened this week when they floated the proposal to extend the right to vote in general elections to EU citizens living in the UK. Immediately, Tories started thundering that this was a plot to hold a vote to reverse Brexit. The fear of such attacks is understandable, although given that even the cautious policy of improving the TCA, which is due for review in 2026 anyway, was also represented as reneging on Brexit, arguably Starmer is taking the hit without getting much credit in return.

I still think that this approach could be augmented by the one I set out in my post last December, in brief, by stating that re-joining would be economically desirable but cannot be pursued responsibly or practically until embraced on a cross-party basis by the Tories. In this way, Labour could openly acknowledge the failure of Brexit whilst keeping the Tories responsible for owning it, and still limit the credibility of the accusation of seeking to undemocratically reverse Brexit.

As for the Brexiters’ diagnosis of their project having failed, this was given new impetus this week by two things.

Brexit delivers (one version of) one of its promises

The first is the expectation that figures are about to be released showing a record high level of net migration, exceeding the record already set by last November’s data. As Jonathan Portes, the leading economist in this area, has repeatedly pointed out, this is a policy area where Brexit has actually delivered what it promised, in the sense that freedom of movement of people has ended, and the UK sets its own immigration criteria and levels. That is also Grant Shapps’ defence of government policy. If Brexiters now feel betrayed, it is because of the dishonesty of a referendum campaign that certainly dog whistled to leave voters that immigration levels would fall.

As it happens, the public seem relatively relaxed about this not having happened, perhaps because of a recognition of post-pandemic labour shortages, but it still has salience amongst politicians on the political right, most notably Home Secretary Suella Braverman. Yet, again reflecting the dishonesty and incoherence of Brexit, her and others’ attempts to claim low immigration levels as a promise of Brexit are at odds with the prominent Brexiter business people like Tim Martin, Rocco Forte and Simon Wolfson who have called for a still more liberal regime.

At all events, Braverman is certainly at odds with the UK’s post-Brexit economic needs, as shown by Rishi Sunak’s announcement this week that more visas will be made available for agricultural workers. It is also the case that overseas students, who are rather stupidly included in migration figures, are vital, both economically and intellectually, to UK universities, one of the country’s few genuinely ‘world leading’ sectors.


The other salt added to Brexiter wounds this week came with the fallout from the scaling back of the Retained EU Law (REUL) Bill, as pre-figured in my recent post, including the listing of the 600 pieces of law to be considered for cutting. This was presented as, and to an extent is, a pragmatic approach by Trade and Business Secretary Kemi Badenoch, although she also managed to imply it resulted from civil service failings (£). But pragmatism is a dirty word to Tory Brexiters, with the likes of John Redwood and the ubiquitous Jacob Rees-Mogg denouncing it, and the creaking great-grandfather of Brexit, Bill Cash, ponderously deriding the triviality of the laws included in the listing.

It may be the case that axing these laws will have little or no effect, since many of them are defunct anyway – although there remain uncertainties and concerns (£) about whether this is so – but if Cash is right it doesn’t seem to occur to him or his fellows that this is one reason why their perpetual complaints about being under the yoke of EU law are so absurd. It certainly won’t occur to them that there are good reasons why their Brexit dream of de-regulation has foundered. One is just that, whatever they may have said since, neither this nor any other form of Brexit was specified at, and therefore mandated by, the referendum. Nor has it ever been put to the electorate by the Tory Party. So if they thought they could smuggle it in by stealth, under cover of Brexit, they have only their own dishonesty and incompetence to blame.

The other is the sheer impracticality of most ideas for significant regulatory divergence, discussed in detail in numerous previous posts, including the recent one on REUL. I won’t repeat that here, but an illustration of the basic point came in a different form this week with the government’s announcement that British food products sold throughout the UK will have to carry a ‘not for sale in the EU’ label. This arises because the Windsor Framework requires food sold in Northern Ireland to be marked in this way, but it is to apply across the UK “for practical and philosophical” reasons.

Not for sale in the EU

The ‘philosophical’ reason is as a sop to unionists and Brexiters: Northern Ireland will not be treated differently, even though the labeling only conceals the basic truth that there is no longer a single Great Britain (GB) and Northern Ireland (NI) goods market. The ‘practical’ reason is so that businesses do not have to use different labelling according to whether the food is sold in GB or NI, and can avoid almost all checks on GB-produced food being transported for sale to NI.

Cue outrage from Brexiters (£), such as Iain Duncan Smith, who declared “this is not why we left the EU. We were meant to be leaving the EU to deregulate, not to over-regulate.” Clearly the penny still hasn’t dropped that acquiring the right to diverge on regulations, even if that right isn’t exercised, automatically increases red tape. That, along with the bureaucratic burdens of being outside the customs unions, is what Brexit has done to businesses, and greater divergence, as envisaged by those who want to scrap the entirety of REUL, ultimately leads, in effect, to the literal or metaphorical marking of all goods and services as ‘not for sale outside the UK’. Meanwhile, it requires those firms which do export to meet the standards of the EU or other destination markets: double regulation, exactly what the single market avoids for trade amongst its members, and, to an extent, with those countries that follow its regulations.

It is astonishing that this still isn’t understood, the more so as, at the same time as complaining that Britain has “squandered the opportunities of Brexit” by failing to deliver regulatory divergence, Brexiters like the Telegraph’s Matthew Lynn (£) are up in arms about the decision of the UK’s Competition and Markets Authority (CMA) to block Microsoft’s takeover of Activision Blizzard, which the EU has now approved. And why is the CMA so foolish, according to Lynn? Because, he explains, “the UK simply does not matter that much. The EU was already looking increasingly ridiculous in its attempts to pose as the world’s regulator – the so-called ‘Brussels effect’, whereby its standards would be adopted globally … For the UK, accounting for only 2.3pc of global output, the idea is even more laughable.” The obligatory sideswipe against the EU aside, the point is both correct and obvious. Yet it seems to elude Brexiters in the wider context of regulatory divergence.  

Tories in turmoil

Although it’s not clear whether they will be able to do much about it when it returns from the mauling it is currently receiving in the House of Lords, the reaction from Tory Brexiters to the watering-down of the REUL Bill looks like being less muted than it was to the reversal they suffered with the Windsor Framework. There are various reasons for that.

Possibly they simply don’t care that much about the arrangements for Northern Ireland – after all, they agreed to the original Protocol which established the basic fact of the Irish Sea border – or reckon that most voters outside Northern Ireland don’t. By contrast, regulatory divergence matters to Brexiters a lot, and they may think that the idea of ‘still being subject to EU law’ will resonate with some leave voters. Moreover, whereas the Windsor Framework, once signed, became very difficult to re-open, and the government categorically confirmed this week that it will not do so (£), it will always be possible to push for the resuscitation of REUL or something like it.

But the biggest reason is, undoubtedly, the now tangible sense since the local election results that Sunak’s grip on power is fading, and that the Tory Party is in turmoil, effectively preparing for who will replace him after the next election is lost.

That was most evident this week with the appearance of Cabinet Ministers Michael Gove and Suella Braverman, as well as Tory MPs Jacob Rees-Mogg, John Hayes, Lee Anderson and Danny Kruger, and aspiring MP Lord David Frost, at the ‘National Conservativism’ (NatCon) Conference, an ironically global gathering of extreme right-wing ideologues.

Meanwhile, at the weekend, there was a gathering of the ‘Conservative Democratic Organization’ (CDO), the pro-Johnson group of grassroots Tory Party members, founded by Peter Cruddas, the disgraced former Tory Party treasurer and Vote Leave and Tory Party donor, who now sits in the House of Lords courtesy of Johnson though against the advice of the Appointments Commission. Johnson himself didn’t bother to attend in person, but Priti Patel, Nadine Dorries and, yet again, Jacob Rees-Mogg did.

Part of what is going on here is simply some of the aspirant replacements for Sunak burnishing their leadership credentials. That almost certainly applies to Braverman, probably to Patel, possibly to Rees-Mogg, and conceivably even to Frost. In itself, that is indicative of Sunak’s faltering authority, as well as presenting a menu of options for his successor which might turn even the strongest stomach and dismay the unfussiest of eaters. More fundamentally, it is about the incipient ideological war within the Tory Party which is going to explode assuming they lose the next election.

I have written about the implications of the NatCon Conference for the Conservative Party in my ‘Brexit Britain’ in the latest edition of Byline Times, so won’t do so here. But the wider picture, as the Guardian’s Gaby Hinsliff writes, is an attempt by “Tory populists” to capture “the ideological soul of the party” at the expense of “Tory realists”. It is a struggle inseparable from the entire story of Brexit and the Conservative Party, and the latest manifestation of the process I discussed at length in February, whereby ‘Brexitism’ threatens to completely displace ‘Traditionalism’ (in the same meaning as ‘realist’ rather than the NatCon sense of traditional Conservatism). Within that, as Rafael Behr wrote this week, Sunak “has not picked a side between reality and dogma, but stands awkwardly between them, in the churned-up bog of a political no man’s land, sinking.”

According to David Gauke, it is “perfectly plausible” that after the election the NatCon (or Populist or Brexitist) takeover of the Tory Party will succeed, and whilst that may do little for its electoral fortunes it will make it impossible for as long as it lasts to envisage a cross-party agreement on substantively closening the relationship with the EU, which would surely be a pre-condition of the EU considering such a change.

Damage and decline continue

As the Tories implode, the damage and decline caused by Brexit grows remorselessly. One issue which put Brexit in the headlines this week has been lurking ever since the TCA was agreed – I think I first mentioned it in January 2021, though, astonishingly, Kemi Badenoch says it “isn’t to do with Brexit” – namely the looming end-of-year deadline by which, in order for electric vehicles to be traded tariff-free between the EU and the UK, their batteries must be at least 60% (by value) sourced in the EU or the UK. Without urgent action, car makers, including Vauxhall, are likely to close factories in the UK.

There is a fairly straightforward, if temporary, solution which Sam Lowe, who has been flagging up this issue for years, explains is to extend the deadline for the application of this ‘rule of origin’ (the link given also explains in more detail the intricacies of this issue, which are greater than my summary of it). But the underlying problem is that the UK has failed to develop what was supposedly one of its post-Brexit industrial priorities, the development of a domestic electric battery industry, exemplified by the failure of BritishVolt gigafactory. And, lurking beneath that, is the UK’s lack of access to the critical minerals needed for such batteries and lack of capacity to process them.

This temporary solution requires, of course, EU agreement to amend the TCA: having ‘sovereignty’ doesn’t give untrammeled freedom of action. As it happens, the EU also faces these problems, making it quite feasible that an extension will be agreed. But the crucial issue will be what happens then. Both the US and the EU (£) are devoting huge resources to securing the minerals and processing capacity, and developing the battery manufacturing capacity, so as to be free of reliance on, especially, Chinese imports. This in turn is linked to the even wider issue, which I discussed in August 2021, about the EU drive for ‘technological autonomy’ and its active efforts to secure supplies of critical raw materials (it also arguably links to the even wider matter of what the growing protectionism of both the EU and the US means for the UK).

There’s little sign that the UK has the political will or resources to do the same. So, even assuming an extension is agreed, if by its expiry the EU has succeeded in making the necessary developments and the UK hasn’t then it will presumably mark the end, in effect, of the UK car industry. And, on the more general issue, that the UK will be squeezed between the US, EU and China in the race for secure and stable access to the materials needed for advanced manufacturing (it’s not just batteries they’re needed for) and, crucially, environmentally sustainable advanced manufacturing. As with regulation, the UK is too small to go it alone.

In a somewhat related way, it was also reported this week (£) that post-Brexit interim arrangements for energy trading make costs for British consumers £1.1 billion a year higher than they would otherwise be. It’s yet another example of the failure of Brexit, and – as with another Brexit development this week, an agreement about how to address the ‘small boats crisis’ (£) – the remedy is closer cooperation with the EU. Yet such remedies are seen by those most willing to admit in public that Brexit has failed as being the cause of, rather than the solution to, that failure.

The invariable cry of those Brexiters bemoaning all this failure is, like Rocco Forte this week (£), that post-Brexit Britain has lapsed into ‘declinism’, which is equally invariably blamed on the “declinist Remainer elite” (£). It’s the same analysis that lay behind Truss’s disastrous mini-budget. The irony is painful. For the reality is that the more Brexit is pursued in the manner they want the more sharply Britain declines.

This is the serious stuff of high-level strategy. It isn’t remotely addressed by the government’s blithe assurances of its commitment to ‘finding solutions’, solutions that don’t exist within the parameters of the Brexit it has created. Nor is it addressed by Labour’s pledge to make Brexit work, since the solutions don’t exist within the modest tinkering with Brexit that Starmer has committed to. Not until the diagnosis that Brexit is a failure is accompanied by realism and honesty about the causes and solutions can it be addressed. There is little sign that the British polity is getting close to that point, and by the time it does the decline may have become irreversible.

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