Friday 2 June 2023

As Brexit fails, attention turns to Labour

The failure of Brexit is now widely acknowledged and ever-more openly discussed. But there isn’t going to be some quick, neat or easy epochal change. Brexiters aren’t going to give up quietly, and the process of addressing the failure of Brexit is going to be complex and fraught with difficulties.

Still, there is a gradual shift under way. For a long time after the transition period ended, the damage Brexit was causing lurked in the shadows. It’s not that it wasn’t reported, but those reports were often piecemeal in nature, rather than drawn together, and Brexit often featured in the small print as a factor in whatever damage was being discussed rather than as the headlines. That is increasingly changing, with a good example being the two-part series assessing Brexit in this week’s Times newspaper (here and here). There’s far too much in it for me to summarise but, although striving almost painfully at times to be ‘balanced’, the overall picture was undeniably clear, and undeniably negative.

Even without much media prompting, and despite a barrage of pro-Brexit reporting from some parts of the media, as well as much Tory boosterism, the public view has for many months been settling to the view that Brexit was a mistake and has failed. The latest YouGov polling records its lowest-ever level of people thinking Brexit was the right choice (31%) and the joint highest-ever level of those thinking it was a mistake (56%). It also shows 62% think Brexit has been ‘more of a failure’ and just 9% that it has been ‘more of a success’. Inevitably the responses of leave voters and remain voters are rather different, but even amongst leave voters the figures are 37% saying failure and 20% saying success, with a lot who think ‘neither’ (35% of leaver voters compared with just 6% of remain voters).

It's worth pausing to consider just how damning an indictment of Brexit those figures are, so I’ll repeat them. Just 9% of all electors, and only 20% even of those who voted for it, think Brexit is a success. By comparison, a 2019 survey found that 16% of the UK adult population believe that the moon landing was staged.

Brexit betrayed

However, there’s an important difference between those remain voters who think Brexit is a failure, of whom about three-quarters think it was always going to be, and those leave voters who think it is a failure, of whom about three-quarters think that it could have been a success if it had been implemented differently. That isn’t a surprising finding, but it matters because it shows that disillusionment with Brexit ‘as an idea’ is far from universal, and also that there is quite a deep seam of opinion susceptible to a narrative of Brexit ‘betrayal’.

It's a seam which Brexiters were always going to mine assiduously, and a particularly unhinged example was provided by Mail columnist Richard Littlejohn last Friday. It wasn’t just about Brexit, but slurs about ‘salivating remoaners’ with ‘loyalty to the EU’ permeated a wider attack on the “New Establishment” – an apparent nod towards political scientist Matthew Goodwin’s half-baked ‘new Elite’ theory - and its supposed “coup” against the government. But careful readers, if such the Mail has, would notice, even if Littlejohn is too careless a writer to realise it, that this was all rather let down by the observation that “to describe all this as a conspiracy is not entirely accurate [as] it's not co-ordinated.” So not, in fact, a “coup” at all.

This kind of ‘stab in the back’ myth (the on-line version of Littlejohn’s article was actually illustrated with a bloody dagger) has always been the most dangerous potential outcome of Brexit, and Jonathan Freedland of the Guardian recently and rightly warned that what follows from it “may be very dark indeed”. That said, it’s worth remembering that, with or without Brexit, Littlejohn has been squeezing stuff like this out of his anger-tightened sphincter into the eager maw of the Mail’s lavatory bowl for 30 years, on and off. In fact, the kind of aggressive victimhood of a ‘lost country’ his writing exemplifies is a big part of what drove the leave vote. It’s not even the first time he has posited a “coup staged by remainers” – he did so as recently as October 2022 – despite having assured his readers in January 2021 that Brexit was “all over bar the shouting”. You couldn’t make it up, to coin a phrase.

Whilst Littlejohn fulminates, other members of the Brexiter commentariat have adopted a more listless and resigned attitude to how the glorious possibilities of Brexit have been squandered. For example, Fred de Fossard of the Legatum Institute wearily bemoans (£) the government’s failure to pursue a deregulatory agenda, though that was never the automatic consequence even of hard Brexit, and laments the forthcoming introduction of import controls, which was. The “climbdown” on Retained EU Law is also dolefully recounted (“the less said about [it] the better”, de Fossard sighs), but with no recognition of why that, or any of the other foregone ‘opportunities’, have failed to materialize. Indeed, scratch the surface and the explanation offered is a more urbane version of Littlejohn’s, whereby “our entrenched bureaucracy ensures [that voters always] get the same Left-wing, Europhile outcomes”. As a result, “the whole concept of Brexit” is now imperilled, the sometime special adviser to Jacob Rees-Mogg glumly concludes.

Brexit’s last defences

Whether blamed on betrayal, or just lack of political will, these responses at least acknowledge that Brexit hasn’t been a success. But some Brexiters aren’t ready to accept that (and never will be). Instead, individual pieces of economic good news are still trumpeted as evidence that it has been triumph, a recent example being the thuggish Tory MP Lee Anderson's boast that the reported decision by Tata to build a gigafactory in Britain rather than Spain is “another Brexit bonus”. The obvious problem is that something can only be a Brexit benefit if it couldn’t or wouldn’t have happened without Brexit, which isn’t the case in this example. And, of course, even where there are any such benefits, they need to be set against the many costs to justify Brexit as a success overall.

It’s also typical of such claims to invoke a strawman that ‘remainers said there would be no more investment after Brexit’ or ‘remainers said there’d be no more trade with the EU after Brexit’, or the slightly different one that ‘remainers blame all Britain’s economic problems on Brexit’. Needless to say, no serious analyst has ever suggested such things, but even if they had then the most it would mean is that Brexit hasn’t been as bad as some said it would be, or that it may not have been a success, but at least it hasn’t been a failure.

For example, in a Telegraph article (£) the pro-Brexit economist Julian Jessop discusses the impact of Brexit on the services sector. It’s headlined as a “success story”, but the content is less ebullient. “If one thinks back to all the apocalyptic claims made by Remainers, our services industry should be a smoking ruin by now”, he says, conjuring up “doomsday predictions”. But worry not, for “the overall impact has been far less than feared”. It’s hardly an inspiring defence. To be fair, Jessop recognizes this, saying “it is not enough just to say that Brexit has been less damaging than expected. It was supposed to benefit the City. But this is a process.” However, this is just another of the stock defences: the benefits are always just over the horizon.

Still less compelling is the current fashion for comparing UK economic performance with that of Germany (£), or perhaps a wider selection of EU countries (£), selected over this or that timeframe, to argue that the UK’s is no worse, and perhaps slightly better. That fashion seems to have arisen because the IMF, its forecasts suddenly now in favour with the Brexiters who usually disparage them, upgraded its 2023 forecast for the UK from a 0.3% contraction to a 0.4% expansion, whilst forecasting the German economy to shrink by 0.1%.

Even if it made sense to ascribe these (rather negligible) differences to Brexit, it would not be much of an argument because, again, Brexit wasn’t undertaken on the basis that it wouldn’t be a failure but that it would be positively advantageous. But, in any case, it doesn’t make any sense. Whether in the EU or not, the UK’s economy, like any member state, fluctuates at different times and for sometimes different reasons to that of Germany (or any other individual country). In particular, Germany’s current economic difficulties are very obviously connected to its rapid diversification from over-dependence on Russian energy. So, except as a kind of schoolyard ‘what about you?’ taunt, such comparisons tell us nothing one way or the other about Brexit.

The key comparisons are between Brexit UK and how the UK would have performed without Brexit. That inevitably involves a counterfactual model, and the latest version of the best-known such model, the Springford CER ‘doppelgänger, shows that by June 2022 the UK GDP was 5.5% lower than it would have been without Brexit. That may overestimate the damage or may underestimate it. But (to the best of my knowledge) neither the government nor any of the pro-Brexit economists have ever produced a comparable counterfactual model showing Brexit to have been economically beneficial to the UK. So on this key test there is, at the very least, no evidence of Brexit being an economic success.

What about Labour?

With Brexiters now engaged in the last stages of their attempt to deny Brexit has failed, and the latest stages of developing fantasies about why it has failed, and with the Sunak government in the throes of a protracted death, attention is increasingly turning to the prospects of a Labour administration. Interestingly, Brexiter fears for what that will bring are diametrically opposite to those of many erstwhile remainers. At least some Brexiters are convinced that Labour has “a secret 10-year plan to take Britain back into the EU” (£), whereas some remainers believe that there is no difference at all between Labour and Tory approaches to Brexit. The reality is more complex than either view allows.

Although by definition it’s unprovable either way, it’s absurd to think that Starmer has a ‘secret plan’ to re-join the EU. There’s literally no evidence for it, so Brexiters are wrong and rejoiners are right about that. However, it’s true that the logic of Labour’s position on Brexit – everything it says about the damage of it – points in the direction of eventually re-joining. So, forgetting any idea of a secret plan, the Brexiters are right to suspect that this would be the direction of travel for Labour (though they may be wrong that it will be the point of arrival), and re-joiners are wrong to dismiss the possibility of it going in that direction (though they may be right that it won’t be the point of arrival).

Remainer or re-joiner scepticism about Labour’s intentions was reinforced this week by Keir Starmer’s Express article, in which he again re-iterated Labour’s policy of no return to the EU, single market or customs union, but of wanting to improve the existing UK-EU Trade and Cooperation Agreement (TCA). Most strikingly, and to many remainers most reprehensibly, he referred to the inadequate nature of that deal as meaning that “our European friends and competitors are not just eating our lunch – they’re nicking our dinner money as well”.

The clue to understanding this article is the polling figures I referred to earlier. It was written for the three-quarters of the 37% of Leave voters who believe Brexit has failed because of the way it has been implemented. More particularly, it was written for the erstwhile and potential Labour voters within that group who may be minded to blame that on the Tories. That is an important segment of voters for Labour to speak to, and the Express is a good place to reach it, with the pitch being based on tapping into, but subverting, the narrative of Brexit betrayal. The language may have been ugly and grating, but politics can be a dirty business, or at least it is for those who value winning above high-mindedness.

Of course, there is a tactical dilemma for Labour: in making its appeal to such voters it may lose support elsewhere (£), and there’s some polling evidence that this is happening. But the delicate calculation is presumably that many who respond to things like the Express article by angrily saying ‘I’ll never vote for Labour now’ will, when it comes to it, do so. Or, if not, that the votes lost will be in constituencies where the outcome isn’t affected, whilst those gained prove decisive in other seats. Again, it’s all grubby stuff for the squeamish, but perhaps they should reflect that after fourteen years in opposition squeamishness isn’t something Labour can afford to indulge.

Beneath Labour’s tactics

Tactics aside, what matters is what lies beneath. In his discussion of Starmer’s article, Ian Dunt, who has been consistently acute in his analysis of Brexit from the start, and often very critical of Labour, argues that “in truth, Labour’s Brexit position is far more nuanced, and much more radical, than it first appears. It has been carefully couched in the language of Brexit defence, but the proposals themselves promise a return to a much closer relationship with the Continent. It is the start of a journey back to Europe.”

The key word here is “journey” or, as I’ve put it, ‘direction of travel’. Starmer is cautiously going with the grain of public opinion, with a poll this week suggesting that 53% of voters favour ‘closer ties’ with the EU, and even in strongly vote-leaving areas a plurality doing so. What they mean by it is undoubtedly varied, but a first-term Labour government can be expected to push its possible meanings to the maximum it could without breaking manifesto commitments or suffering too much electoral kickback.

For an important example of what this would mean, in a footnote to my previous post I suggested that the seemingly arcane difference between Swiss-style ‘dynamic alignment’ and New Zealand-style ‘regulatory equivalence’ in Sanitary and Phyto-Sanitary (SPS) standards might become an issue under a Labour government, since Labour’s apparently preferred policy of a New Zealand-style deal had already been rejected by the EU, whilst a Swiss-style deal had been ruled out by Starmer.

I meant that we might hear more about this in years to come, so it was much to my amusement that, just a few hours later, and presumably coincidentally, the Telegraph carried a report (£) ‘revealing’ this EU rejection of a New Zealand-style deal and, with almost heart-stopping irony, quoting David Frost castigating Starmer for “trying to sell unnegotiable fantasy proposals to voters”. In a mirror-image of that critique, some remainers, too, leapt on this report as evidence that Starmer was just reproducing the impossibilities of “cakeism”.

But it is easy to imagine Labour in power, having pledged in their manifesto to negotiate a ‘veterinary agreement with the EU’, agreeing dynamic alignment with the EU. That isn’t cakeism, as it has already been offered by the EU, and the fact that Starmer has previously said he doesn’t want a Swiss-style deal will be irrelevant as he has also said he wants a ‘bespoke deal’ and, almost by definition, any UK-EU deal will be that. Will electors who support ‘closer ties with the EU’ object? Highly unlikely. And if there is a ‘bespoke UK-EU’ SPS dynamic alignment deal then it means the hard Brexit ECJ red line will have been comprehensively breached, allowing it to be breached in all manner of other ways, in relation to trade, security, and participation in various programmes and agencies.

Beneath Labour’s hints

Much of this has already been hinted at by the public statements of Starmer and other senior Labour politicians, including Rachel Reeves and David Lammy. A much more detailed set of proposals for what it could mean in practice was published this week by the UK Trade and Business Commission, an unofficial but highly professional grouping of cross-party MPs, business people and experts. Their report, which is based on extensive evidence-gathering from a huge range of stakeholders and experts, contains 114 recommendations. So far as I can see, all of them are compatible with Labour’s stated position and so the report amounts to a blueprint of how to operationalize that position.

Some, though by no means all, of this entails EU agreement, and there are obviously important questions about whether that would be forthcoming, and a particularly valid question about the extent to which Labour are putting too much reliance on using the scheduled 2026 TCA review as an occasion for a more substantial re-negotiation. It certainly isn’t automatically entailed by the review. However, in his recent evidence to the European Parliament, Anton Spisak, a Brexit expert at the Tony Blair Institute, urges that both the EU and the UK would be wise to use it in that way, so as to “begin a more strategic discussion”.

It is at least possible that this view will prevail and, of course, it will still entail negotiation, but much that could have been negotiated had it not been for the Frost-Johnson ‘sovereignty’ line will become possible. Nor is the TCA review the only game in town. The European Political Community (EPoC), established last year and which had its second meeting yesterday, offers the UK a new vehicle for dialogue and cooperation with the rest of the European continent. How it develops remains to be seen but, with enthusiastic and effective participation, which would be unlike Sunak’s approach to it but consistent with Labour’s stated policies, the UK could at the least repair some of the relational and reputational damage of Brexit. Potentially, there would be more substantive outcomes.

All of this could be done without violating Labour’s red lines on rejoining the EU, the single market or the customs union. Those red lines don’t prematurely box Labour into a corner because there’s just no way that, simply from an EU perspective, the UK re-joining is viable in the timeframe of the next parliament: we’re in that corner anyway. Equally, going as far as possible within those red lines wouldn’t be ‘re-joining by stealth’ since there would be no re-joining unless there was a referendum. It would all be subsumed within the rubric of ‘closer ties’ and ‘co-operation’, potentially leading to such a referendum, perhaps in Labour’s second term, as Dunt suggests.

This is exactly what Brexiters fear, which is also why the hostility of some remainers/ rejoiners to Labour’s approach is misjudged. At the very least, even if it never gets to that point, the ameliorations Labour are likely to enact will be somewhat better than the current situation, and much better than would be the case if the Tories were re-elected and the Brexit Ultras got their way.

The long road ahead

This isn’t to disown what I said In a recent post, where I argued that the strategic problems posed by the failure of Brexit are not “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”. It’s true that even if what I’ve said about Labour’s position today is right it still fails to meet this test, but the issue is the process and timescale for getting to that point. It is clear that this is going to take some time, so the question is whether a Labour government would take use closer to or further from that point.

On this, to quote Ian Dunt again, “if you put aside the tedious and unconvincing hardline rhetoric, a clear picture emerges. Brexit is collapsing. And Britain is, slowly but surely, drifting back to Europe”. It’s also true that the longer this drift takes, the more damage that will accrue in the meantime. That’s undeniable, even if Labour isn’t able to admit it. But it presumably goes without saying, at least to readers of this blog, that Brexit was a seismic event, so the political road to rebuilding from the earthquake is going to be arduous and slow. Opinion polls showing increasing national regret are vital, but they are a long way from being enough. Like it or not, we’re still barely on the first step of that road but, that being so, the worst thing we can do is refuse to take it because it is only a step. Equally, it’s perfectly right to keep pushing for the next steps, and necessary, too, if they are to be taken.

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