The new Brexit consensus

Last week’s seventh anniversary of the referendum saw a surge of interest in Brexit, with numerous commentaries, including my own, looking back or taking stock. What all of them had in common was some kind of acknowledgement, even if only implicit, that Brexit has not proved to be popular and is widely viewed as having been a mistake.

For those who always opposed Brexit, this is no surprise because we never expected it to be a success. Brexiters, however, are in a more complex situation. They are torn between wanting to argue, like former Trade Secretary Peter Lilley, that Brexit actually has been a success (£), and wanting to argue, like the IEA boss Mark Littlewood, that the government has failed to “reap the true rewards of Brexit” (£). It is a tension which has been the defining feature of the years since the end of the transition period and, as I’ve remarked before, is one of the prime reasons why Brexiters have lost the ‘battle for the narrative’ in that period: why would public opinion swing to the view that Brexit was the right thing to do, when so many Brexiters spend so much time complaining about it?

Although the idea it was the right thing to do, but it was done in the wrong way, isn’t likely to build support for Brexit, there is polling evidence that it holds sway amongst 2016 leave voters. Of the 37% of leave voters who think Brexit has been a failure, some 75% of them think that it could have been a success, whereas of the 89% of remain voters who think Brexit has been a failure only 24% think it could have been a success.

Despite these differences, there is within this the very slender basis of a political consensus: whatever they ascribe it to, a miserable 9% of the public think that Brexit has been a success. Far from solving any of Britain’s problems, Brexit is now itself a problem in need of a solution. So what might the solution be?

The Brexiters’ solution part 1: Back to the future

For some Brexiters, notably Northern Ireland unionists and those close to them, one part of the solution lies in endlessly propounding the same solutions they have always wanted. Thus this week the Centre for Brexit Policy unveiled its great way forward for Northern Ireland which – it’s hard to know whether to laugh or cry – turns out to be the idea of ‘Mutual Enforcement’, which it proposed in almost identical terms in its September 2021 report and before that in its February 2021 report. Indeed, its roots lie in the stream of ‘alternative arrangements’ proposals for the Irish border during 2018-2019.

It's not going to happen because, as border expert Professor Katy Hayward pointed out at the time of the 2021 version, it doesn’t meet the basis tests of what is needed. Not only has it been rejected by the EU, but it has been rejected by the UK government. Moreover, George Peretz KC has eviscerated this latest report’s claims about the legal basis for voiding the existing agreement. In any case, although the report talks of the arrangements for Northern Ireland being an ‘unresolved’ issue, politically, the chance of Rishi Sunak ripping up the Windsor Framework – one of his few tangible achievements as Prime Minister – is precisely the square root of Sweet Fanny Adams. That of the EU negotiating a new deal even less than that.

Even Iain Duncan Smith, launching the report, seemed to have no great expectations of it, but ascribed this to Joe Biden being “anti-British” and imagined that Brexit wouldn’t be “completed” until there was a different US President. As ever, the leprechauns have hidden the pot of gold but there are still some Brexiters searching for the end of the rainbow. Even more fantastical is the revival, on the wilder fringes of the Brexit Blob, that it would have been better to leave the EU with no deal at all. To change the metaphor to one I’ve used before on this blog, it is as if some Brexiters are stuck on a Mobius Strip, endlessly going around the same loop in the vain hope of arriving somewhere new.

The Brexiters’ solution part 2: Onward to the promised land

However, I think that most Brexiters realise that, to change the metaphor again, the dead horse of re-visiting the terms of Brexit isn’t going to run, still less win the Derby, no matter how hard it is flogged. Instead, for Littlewood, Lilley and almost all the Brexit Ultras, the solution to the problem of Brexit’s failure lies in ‘making use of Brexit freedoms’. However, they are remarkably coy about what this means. One reason for the coyness is that such Brexiters have rarely wanted to spell out their agenda in terms of cutting employment rights and environmental protections, knowing how little public support it has. Another is that when it comes to the more palatable-sounding ‘regulatory divergence’ they don’t really know what they mean.

Writing in the Mail, Andrew Neil (who would no doubt abjure being labelled a ‘Thatcherite Brexiter’, but whose writings on Brexit seem indistinguishable from theirs) began his referendum anniversary article by acknowledging that there is, indeed, a problem, with neither remainers nor leavers being pleased with Brexit. Towards the end of a long and largely vapid discussion, he suggests the solution is to make the most of Brexit, meaning:

“A dynamic digital economy. Low, competitive taxes for individuals and business. Light-touch regulation of new technologies. A robust welfare-to-work programme to tackle poverty and labour shortages. The reskilling of our people for the digital age.”

There are several things that are striking about this list, most obviously that much of it doesn’t even require Brexit (and Neil implies as much by saying they are “probably easier to achieve” outside the EU, although he doesn’t say why). But, just taking the ones that could be Brexit-related, which are those concerning regulation of new technologies and, probably, the one about the digital economy (as presumably it implies light-touch data protection regulation), what is also striking is how vague they are. I realise this is an article in the Mail, and that Andrew Neil isn’t exactly on all fours with Wittgenstein as a profound thinker, but, still, after seven years, this is very thin on detail.

Same old problems

Crucially, it doesn’t even begin to acknowledge the central problems with divergence towards light-touch regulation. I’ve rehearsed these so many times on this blog that I won’t repeat them in detail here, but the principal problems are that any UK national regulatory system forces those UK firms who also export to face the costs of double regulation, unless the UK system becomes widely used internationally, which is unlikely because the UK isn’t large enough.

These are essentially the points made just this week by the Chair of vehicle-maker Ford, Tim Slatter. Arguing that Britain should continue to follow EU car regulations “otherwise, what we're going to see is a lot of extra cost come into the cost of developing vehicles and producing vehicles”, he continued that:

“It's very important that Great Britain maintains good regulatory alignment with the European Union. There are sort of three big regulatory environments for automotive in the world. There's the North American one, the European one and the Japanese one. And it's really important that we maintain really good alignment to the European one, because that's where we build and sell most of our vehicles.”

This, or versions of it, is the constant, practical, block to post-Brexit regulatory divergence. In this sense, the deregulatory Brexiters are as stuck in a loop as those Brexiters still droning on about Mutual Enforcement and replacing the Protocol (in fact, they are very often the same people). They keep calling for the same things and keep failing to understand why they haven’t happened to any great extent, as shown by the latest edition of the UKICE regulatory divergence tracker. But, rather than reflect that this is because of the fundamental flaws in their ideas, they persist in blaming remainers and insisting that the solution depends on stronger belief in Brexit.

When faith meets reality

Thus Andrew Neil recognizes that Sunak is not going to follow a “radical Brexit Britain agenda”, but ascribes it to him not being a “true believer” in Brexit. Belief can mean many things, but amongst the more cult-like Brexiters there is the sense that it means something like ‘faith’, in a quasi-religious way, such that reality will bend if faced with a sufficiency of it. For commentators and politicians who are not in power, it is easy to sustain that faith, but almost invariably, when in power, it becomes impossible to do so in the face of reality. That is why so many Brexiters, when given the power to implement it, went on to resign. Brexit Secretaries David Davis and Dominic Raab are both examples. They preferred to keep their faith intact rather than face reality, but others did the opposite and faced reality, for which the faithful inevitably despised them.

That is what Theresa May did, having embraced hard Brexit, when, as regards regulatory divergence, she came to the view in the Chequers Agreement that there needed to be a “common rule book” for goods, at which point the Brexiters turned on her as being ‘Theresa the Remainer’. In a more limited way, Kemi Badenoch did the same thing when reining back the scope of the Retained EU Law Bill, for which she too was reviled by some Brexiters. In a somewhat different way, Steve Baker also made that journey in relation to the Northern Ireland Protocol, and, again, was denounced by the Ultras.

Even Johnson, for all his bluster, never actually enacted the regulatory divergence the Brexit Ultras want, and always drew back from completely violating the Protocol or even from following through on his many threats to invoke Article 16. Perhaps in his case that was aided by the plasticity of both his faith in Brexit and his relationship with truth, but the general point is that the practical realities of governing always, at least so far, and just about, trump faith in Brexit.

Sunak’s solution

As for Sunak, although regarded by some as having never been a ‘true Brexiter’, he is in fact a particular sort of Brexiter, a technocratic globalist rather than nationalist, and therefore neither viscerally antagonistic to the EU nor bothered by the supposed sovereignty violations of international or trans-national regulation. For example, as Neil points out, his approach to Artificial Intelligence has been to seek to lead global regulation, rather than to be hostile to regulation.

In that, as discussed in my recent post on the topic, Sunak displays one kind of Brexit delusion – about the UK as a global regulatory leader – and thus it doesn’t make him less of a Brexiter, but does show that (like Thatcher herself, in fact) by no means all Brexiters, even on the Thatcherite right, are advocates of national regulatory divergence. This is also shown by the fact that, as Chancellor, he signed up to the OECD agreement to set a 15% minimum corporation tax rate (presumably with Johnson’s acquiescence). It is also shown by the announcement this week that the current Chancellor (presumably with Sunak’s blessing) signed the long-delayed Memorandum of Understanding with the EU over financial services regulation, something unlocked by having agreed the Windsor Framework. Equally, Badenoch’s retreat on Retained EU Law must have been at least authorised, and very likely advocated, by Sunak.

The other Brexit consensus

All of this clearly infuriates the ‘diverge and de-regulate’ Brexiters, since it is precisely the opposite of what they see as the solution to the Brexit problem. But, just as the difficulty they have always faced is lack of political support for their deregulatory agenda, so, now, they face the specific difficulty that this is absolutely at odds with how the public see the solution to the Brexit problem.

For there is one other slender piece of consensus, apart from the near-universal acceptance that Brexit has not been a success. It was revealed by a poll conducted for the Tony Blair Institute (TBI) last week, asking respondents which option they favoured for the UK’s relationship with the EU over the next ten to fifteen years.

Amongst all voters, the preferred option of 43% is to re-join the EU, 13% to re-join the single market (but not the EU), 22% to re-join neither but seek a closer trade and security relationship with the EU than at present, 7% to keep the relationship as it is, 5% to minimise economic and security ties, and 10% don’t know.

Amongst leave voters, with those options in the same order, the preferences are: 13%, 21%, 37%, 8%, 9%, 11%

Amongst remain voters, with those options in the same order, the preferences are: 73%, 6%, 8%, 5%, 2%, 6%

So this suggests that 78% of all voters, and even 71% of leaver voters, would prefer some version of a closer relationship with the EU, and note that this is a large increase from the 53% who favoured closer ties in a May 2023 poll (though differences in survey methodology may account for some of that). Obviously the majority of voters, and the vast majority of remain voters, want more than just closer ties without any form of rejoining, so there is only limited consensus about what a ‘closer relationship’ would mean. But it can certainly be said that there is a clear consensus against the standard Brexiter view of wanting greater divergence, which in the TBI poll only has 5% support amongst all voters and only 9% support even amongst leave voters.

It can also be said that, whilst there is no clear consensus on what a ‘closer relationship’ should be, there is at least an implicit consensus for a closer relationship outside of the EU and the single market. This needs to be phrased very carefully: of course, there isn’t a consensus view for that as the preferred option, but it is difficult to imagine that anyone who preferred to re-join the EU, or preferred to re-join the single market, would actually object to closer ties without doing either.

Many of those might say that there is no point in it, on the basis that it won’t make enough, or any, difference, but that wouldn’t be to object to doing it per se. Conceivably, some of those might say that doing so might, by ameliorating the damage of Brexit, undermine the momentum towards re-joining, and object on that basis. But anyone making that objection would at least implicitly be accepting that following this option would ‘make a difference’, as otherwise it could not adversely affect the case to re-join.

Thus, overall, there is a certain kind of consensus here, around three things: the vast majority of electors do not think that Brexit has been a success and the great majority of voters do not support greater divergence from the EU and the great majority of voters either support or at least do not object to the UK seeking a closer relationship with the EU. It’s not inevitable that this consensus will hold but it’s also more than possible that it will grow, for example when the fresh costs and disruption of starting to implement import controls on goods from the EU begin to emerge in October.

Delivering the consensus view

This very limited consensus is reflected by the current leadership of the two main Westminster parties. But Sunak’s ability to go very far with it is highly constrained by the fact that, whatever voters think, many of his MPs will vociferously disagree with him doing so. Notably, he has still failed to reach an agreement over UK participation in Horizon, to the major detriment of UK science and industry (though in that case he has been reported to have his own reservations, as well as facing the inevitable demands from the Brexiters to stay out). In any case, it is unlikely he will be in power after the next election and the Tory Party will, almost certainly, head off in the most dogmatic and extreme direction about relations with the EU, deregulation and just about everything else.

So it is really the anticipated Labour government which matters. Quite how far that government will choose to seek, and more importantly be able to agree, closer relations with the EU remains to be seen. But there are quiet noises that Starmer is getting bolder, and that Labour will try to maximise the closeness of ties with the EU, within the considerable limits of remaining outside the EU, single market and customs union.

One thing is for sure, whilst doing so will attract anger from the pro-Brexit media, Starmer will not have anything like the drag-anchor of the ERG to constrain him. Rather, he is more likely to face pressure from within his party to go further, both in what he promises before the election, which, after all, is still likely to be over a year away, and what he delivers afterwards. Moreover, whatever noise the Brexit media make, the issues involved are mainly going to be too technical and abstruse for the public to get worked up about – indeed the reality is that, outside the Brexit blob, hardly anyone ever remotely cared about having sovereign control of, say, SPS regulations, or had even heard of them.

The TBI polling referred to earlier was within a report setting out in some detail what a maximal approach would be (perhaps one should call it – maximal within minimal), and, as Robert Shrimsley of the Financial Times recently discussed (£), the TBI looks set to be a major influence on the Labour government. The report is also worth reading as it disposes of some of the standard objections to Labour’s approach, such as that it is a new version of ‘cakeism’ or of ‘cherry-picking’. As for the question of how much the EU will agree to, it is certainly important not to be starry-eyed about this and to repeat the Brexiters’ naivety about the EU’s power and determination to pursue its own self-interest. However, Mujtaba Rahman, one of the best-connected and best-informed analysts in this area, has recently argued that there is more room for flexibility than the EU’s official position suggests.

There’s another point here which I don’t think is ever discussed. Even if a Labour government failed to achieve any change at all in the Trade and Cooperation Agreement, at the very least it can remove the spectre of regulatory divergence which is ever-present under the Tories. A report this week in the Financial Times (£), which was mainly about how post-Brexit border frictions are pushing British firms out of EU supply chains, mentioned in passing how “uncertainty about UK regulation, which no longer tracks EU rules” is a deterrent for investors. Such uncertainty is also the reason why the EU hasn’t granted an equivalence agreement on financial services (£), and is unlikely to do so whilst it persists, notwithstanding this week’s Memorandum of Understanding. These kinds of uncertainties could be removed for years by a Labour government simply giving a commitment to continued alignment, which requires no agreement from the EU, and this appears to be consistent with Labour’s stated policy.

Beyond the consensus: Re-joiners have more to do, but much to celebrate

Naturally none of this will satisfy most of the 55% of voters who would currently vote to re-join the EU. But, for now, it is the only game in town, in the literal sense that there isn’t the remotest sign of any UK government holding a referendum in the next parliament which takes us to, probably, 2029. That doesn’t imply that re-joiners should cease to campaign for what they want, as the only way the game will change is by moving beyond the current, very limited, consensus. Their task is to sustain and build a durable majority in the opinion polls for re-joining over the coming years so as to make it politically viable for the UK and for the EU. If that seems a rather dour and depressing analysis, I don’t think it should. Considering all that has happened since 2016 it is truly remarkable and noteworthy what has been achieved.

Firstly, the hard-right, deregulatory, ‘Singapore-on-Thames’ Brexit (not that they ever understood what ‘Singapore’ would mean) is, for now and the foreseeable future, off the political agenda. I have consistently argued, and taken quite a lot of flak for doing so, that those remainers who insist that ‘this was always the real agenda of Brexit’ make exactly the same error as those Brexiters who insist that ‘this is what true Brexit means’. Both miss the point that Brexit had multiple and contradictory meanings, and it could develop in multiple different ways. However, that’s not to deny that Brexit most certainly could have gone in the hard-right direction, and under Liz Truss it very nearly did. But, for the most part, it hasn’t.

Secondly, remainers and rejoiners have, certainly for now (although it is never over), won the ‘battle for the narrative’ which, as I argued in January 2021, would follow the end of the transition period. In May 2022 I wrote that Brexiters were losing that battle and by December 2022 that Brexit was slowly being discredited. In the months since then it has become ever-clearer that this is so. That is shown not just by the opinion polls about Brexit being a mistake and a failure but also by those now showing a fairly consistent, though by no means unassailable, majority to re-join the EU.

Both of those achievements would have seemed incredible in the immediate aftermath of the referendum, or in some of the dark days which followed, such as when the Mail dubbed High Court judges “enemies of the people” or when Tory MEP David Bannerman called for those with “extreme EU loyalty” to be tried for treason. It took a lot of resilience, and even some courage, for those who knew Brexit was a terrible, catastrophic mistake to keep saying so over the long years since, and that has reaped rewards. But the ‘de-Brexitification’ of Britain is going to be a long, slow process, calling for still more tenacity, and a considerable degree of patience.

 

Summer Recess: On that, hopefully relatively upbeat, note, I am going to take a long summer break from blogging. Although there’s always some Brexit news to discuss, experience suggests that the summer political shutdown means that it slackens off (last year being a notable exception). If something major relating to Brexit happens, or just something which particularly captures my attention, I will write a post. Otherwise, I don’t plan to post again until Friday 15 September when I will begin what will be the eighth year of writing this blog.

As always, my huge and sincere thanks to all the tens of thousands of people who read each week via various channels. I know very well that this blog competes for limited time and attention with any number of other sources, and I never take your readership for granted.

Finally, in case of interest, a new edition of my book Brexit Unfolded. How no one got what they wanted (and why they were never going to) will be available on (provisionally) Tuesday 19 September. This updates the previous edition by adding the ‘story’ of what happened from the end of the transition period (when the first edition ends) to the seventh anniversary of the referendum in June 2023. It can already be pre-ordered from Biteback Publishing, and the same link will be updated with more details about the new edition over the summer.