The Brexit battles never went away, and they’ve got a long way to go

A recurrent observation – made sometimes with surprise and sometimes with a kind of perverse nostalgia - about this week’s political and parliamentary events is that it is ‘as if the Brexit battles have returned’. And it is true that, like an ageing rock band, re-formed to reprise its well-worn hits despite the much-publicized hostilities of its members, there were some all too familiar sights and sounds. Thus, as the Rwanda Bill ‘crisis vote’ approached, there were fevered speculations, briefings and counter-briefings, and crisis talks with the almost endless number of factions that make up what can still just about be called the Conservative Party.

As with such a band, it came as a slight surprise to learn that some of its members had not long ago died of self-abuse, as when the raddled features of Mark Francois emerged to announce the findings of the self-important dolts of the ERG ‘Star Chamber’, chaired by the apparently indestructible Bill Cash. The show even began in the time-honoured way with a rendition of the classic ‘cave-in of the Tory moderates’, to set the toes tapping. Francois did, however, introduce one new number, ’the Five Families’ which, it seems, refers to a grouping of some the right-wing factions which, indeed, have much in common.

The Brexit battles never went away

But the observation is wrong. It is not ‘as if the Brexit battles have returned’. They are the same battles, and they never went away, and they are explicitly seen as such by people like ‘New Conservative’ Miriam Cates. There are multiple, interwoven strands to this. One is that, as I suggested in my book on Brexit, a possible post-Brexit scenario would be a push for a Brexit 2.0 of derogation from the European Convention on Human Rights (ECHR) and, indeed, for months now, there have been growing calls from the Tory right for just that.

That scenario seemed possible not just because of the insatiability of Brexiters but because, as discussed in last week’s post, even before the referendum they conflated issues of EU membership with those of the ECHR. For that matter, it shouldn’t be forgotten that during that period, when Theresa May was still a remainer, she argued for withdrawal from the ECHR, whatever the outcome of the referendum, and that later, as Prime Minister, she vowed to fight the 2020 election (sic) on a platform of ECHR derogation (£).

It’s true that derogation isn’t what is at issue with the Rwanda Bill, which instead is an attempt to legislate to ‘disapply’ in domestic law some provisions within the ECHR, and certain other international agreements, in relation to the Rwanda policy (Dr Alice Donald and Dr Joelle Grogan of UK in a Changing Europe provide a detailed explanation of its provisions). However, some of the right-wing critics of the Bill would certainly prefer derogation, and all of them want it to go further in disapplying international law, especially in relation to whether individual appeals against trans-shipment to Rwanda would be allowable. In this sense, they are indeed pushing for a Brexit 2.0 scenario.

Closely inter-twined with that is the issue of whether the current Bill itself threatens to break international law. The government claims that it is framed in a way which stays just short of that, and this is the basis on which the ‘moderates’ of the One Nation group backed it. However, the UK Parliament’s Joint Committee on Human Rights issued a statement this week arguing that, even as drafted, it already breaches international law, a view endorsed by Professor Mark Elliot of Cambridge University, a leading authority in this area. In flirting with violating international law, or even actually doing so, the Rwanda Bill again represents a continuation, rather than a re-appearance, of something that began with Brexit. For it was not until the Internal Market Bill (IMB) of September 2020, which threatened to break some provisions in the Northern Ireland Protocol (NIP), that any British Minister had proposed legislation which would self-avowedly break international law.

The two aspects of Brexit nihilism

That threat arose again, with the Northern Ireland Protocol Bill in 2022, and although, in both cases, it did not actually happen, it shows how Brexit, specifically, has proved the catalyst for an almost nihilistic frenzy on the political right. One aspect of that is a kind of Jacobinism in which no measure is too extreme if it delivers Brexit, whether the price be the economic one of ‘no deal Brexit’ or the reputational one of reneging on international agreements. From quite early in the Brexit process, and especially once Boris Johnson came to power, international pariahdom seemed to matter not at all to the Brexiters. It is now abundantly clear that he signed the NIP without intending to honour it, and that many Brexiters who voted for it in parliament did so in the expectation that it would not be honoured.

A second aspect of this nihilism, related but slightly different, is a doctrinaire and wholly absurd idea of parliamentary sovereignty, within which international law is not just something that can be ignored but something which is actually meaningless. On this argument, which has been foregrounded again in relation to the Rwanda Bill (£), because parliament is sovereign it cannot be bound or constrained by anything else. At the time of the IMB proposals, this ludicrous argument was actually endorsed by the then Attorney General Suella Braverman.

That it is ludicrous was explained at that time, again by Mark Elliott, and, now, he has written of the Rwanda Bill that:

“it proceeds on the basis of the sleight of hand that the UK Parliament, because it is sovereign, can somehow free the Government from its international legal obligations. But this is to conflate the sovereignty of the UK Parliament in domestic law with the UK’s sovereignty on the international plane as a State. It is precisely in exercise of its State sovereignty that the UK can enter, and has entered, into binding treaty obligations.”

At its extreme, this idea of parliamentary sovereignty leaves no constitutional place for domestic courts, let alone international ones (actually, at its most extreme, as noted in my last post and amplified by Ian Dunt’s Substack, it proposes that parliament is sovereign over reality itself).

It is important to understand that these are not arcane points of legal or political theory. They have a crucial practical importance. For one thing, the UK is hardly in a position to call on other states, be it China, Russia or Israel, to act within international law and to respect human rights if its position is that sovereignty allows every country to do whatever it wants. For another, the UK is hardly an attractive partner for other countries to strike deals with, whether about trade or, even, asylum processing, if it reserves the right to violate those deals. And, for a third, which should matter to everyone, this doctrine makes it possible that parliament might act to remove any and every right from any or all of us, with no recourse to any court. It is precisely to constrain that possibility that we need the principle that there are some laws and rights that transcend the power of nation states.

It may seem as if these two aspects of Brexitist nihilism – the ‘Jacobin’ ruthlessness that the end justifies the means, and the ‘sovereigntist’ idea that parliament is unconstrained – are the same. But the reason I said they are ‘slightly different’ is because at times they contradict each other, even though they are often espoused by the same people.

Specifically, throughout the Brexit process, the idea of the ‘will of the people’ was often claimed by Brexiters to mean that sovereignty lay, indeed, with ‘the people’, and the constant accusation was that parliament was improperly ‘thwarting’ this will. But, if parliament is sovereign, how could there be anything improper in this (even assuming that was what parliament was doing)?  Moreover, the most extreme example of the Jacobin aspect was when Boris Johnson and his minions unlawfully prorogued parliament showing, in fact, utter contempt for parliamentary sovereignty. For, remember, their specific objection was to the way that parliament itself was passing legislation like the Benn Act (to prevent no-deal Brexit) in defiance of the Executive.

More generally, Brexit has been used as a pretext to sideline parliament, for example through the burgeoning use of ‘Henry VIII powers’ and, of course, but for the first Gina Miller case, parliament would not have had a vote on triggering Article 50. As with prorogation, it was only the courts which acted to constrain political power and, in these cases, to constrain the power not of parliament but of the Executive.

Rwanda Bill: Brexitism won the day without winning the vote    

In short Brexit nihilism is ludicrous in theory, dangerous in practice, and incoherent in both theory and practice. But it hasn’t just re-emerged for an encore with the Rwanda Bill. It is embedded in British politics. That is most obviously the case with the Tory Party which, as I wrote a couple of months ago, has been driven mad by Brexit. Even longer ago, in August 2022 when the Tories were engaged in choosing their new leader, who subsequently turned out to be Liz Truss, I made the point, which has become almost a cliché since then, that the Tory Party had become ‘unleadable’.

That had been only temporarily masked by Boris Johnson’s 2019 election victory. It gave the government a substantial majority – albeit one now whittled away to 56 by by-election losses and expulsions – but, actually, apart from the very early vote to pass the Withdrawal Agreement that ‘got Brexit done’ (sic), it was always a fragile majority, and factionalism and infighting were never far from the surface. Then, following the Truss implosion, Rishi Sunak briefly had enough control over the Brexit Ultras to squash the rebellion over his Windsor Framework, which at one stage threatened to muster more than 100 rebels but in the end fizzled out. At that time, I, like others, wondered if Britain’s Brexit fever had finally broken.

That has proved not to be the case. Although Sunak also won this week’s Rwanda Bill vote, with many of the ‘five families’ abstaining rather than voting against, the circumstances are very different to the Windsor Framework vote. For one thing, this is only the beginning of a legislative process which, assuming House of Lords opposition, has no realistic chance of being completed before the next election. There are plenty more votes on possible amendments to come which the rebels may win.

For another, even though the Brexitists want to make the legislation even ‘harder’, its existence even in its current form shows the extent to which their ideology has captured “the soul of the Conservative Party”. A rather naïve column from Iain Martin in the Times (£) suggested that what happened this week was that the “moderate MPs” who form “the bulk of the parliamentary party” had shown how marginal the “fundamentalist Brexiteers” have become. What that misses is just how immoderate the entire party has become, so that what would once have been an extreme position is now mainstream.

Because this wasn’t Sunak ‘the pragmatist’ of the Windsor Framework, temporarily putting the Ultras back in their box. It was Sunak, with the support of the ‘moderates’, making as one of his central priorities an unworkable, immoral, and probably illegal populist policy, that began with Johnson, and finding that, as always, the Ultras want more. It doesn’t even matter if they don’t get that from Sunak now since, as Robert Shrimsley astutely pointed out this week, it will just be grist to their post-election mill that his government failed by not being ‘pure’ enough in its Conservatism.

Where is the Tory Party heading?

But the Tory Party is really no longer discussable without reference to Reform and Nigel Farage. Clearly that has been true for a while, going right back to UKIP and the roots of the referendum. It was certainly obvious at the last election, when Farage stood down from fighting most Tory-held seats. Now, the two are inseparable, both at the level of electoral fortunes and, perhaps more importantly, because there is no discernible ideological difference between Reform and most of – if we must call them so – the ‘five families’.

That’s especially so for the New Conservatives and National Conservatives, and there’s almost a sense – or am I imagining it? – that the ERG now seems slightly dated and quaintly respectable by comparison with this new breed of Tory rightwingers. Bill Cash may be many things, but he isn’t a Jonathan Gullis or a Lee Anderson. Even Francois is more ludicrous than sinister. It’s a bit like the way that ‘old school’ gangland bosses like the Krays were displaced by even more ruthlessly violent psychopaths. Say what you like about the ERG, but at least they looked after their own and loved their dear old mum, so to speak.

At all events, there’s no doubt the direction the Tories are heading in, at least in the short-term, assuming they lose the next election (and it’s telling that an ambitious one-time ‘moderate’ like Robert Jenrick is now re-positioning himself in anticipation of this direction). Even if Martin was right that there are still ‘moderates’ in the parliamentary party, it is undeniable that the membership, which will choose its next leader, is far from moderate. The Johnson-Farage dream ticket may just be a dream (or, perhaps, a nightmare), but the fact that anyone would even float such an idea, or that others pine for a Liz Truss comeback, shows the madness that is in the air. We may even see a complete re-alignment of the British Right, drawing in Reform but excluding what has previously been understood as Conservative traditionalism (for all that such an alignment would claim to be one towards ‘true Conservatism’), with it becoming the Brexitist Party in all but name.

Such a party, perhaps more likely led by one of the NewCons like Cates rather than one of the more familiar throwbacks like Braverman, and endorsed if not joined by Farage, would campaign not just on draconian anti-immigration policies but also on derogating from the ECHR and, very likely, reneging on the NIP.  This might doom the right to electoral irrelevance, but that certainly can’t be assumed, especially after the Brexit vote, even if the 2024 election sees a virtual Tory wipe-out. There is probably bedrock support of around 25%-30% of the electorate for such a Brexitist or NatCon party, augmented by some who habitually don’t vote and others who, after a few years of a Labour government, come to think that any kind of change, and any kind of ‘kick to the Establishment’ is justified.

That could create an electoral coalition similar to that which Vote Leave constructed, and, unlike then, it might only need, say, 40% of the vote rather than 50% to win an election, and it would have vociferous support from many sections of the media. Even if it only came close to winning, that might cement a NatCon takeover of the party for another electoral cycle, and for so long as it wasn’t in power then the many internal contradictions of its likely economic programme, which Times columnist Danny Finkelstein identified this week, could be glossed over. Indeed, as with UKIP and Brexiters in general, such a party could be far more effective and influential as a campaigning protest movement than as a government.

The Brexit battle to come

This is just speculation. But, assuming it has any plausibility at all, it is highly relevant speculation at least in relation to what will undoubtedly be continuing debate about re-joining the EU or the single market. That was given new impetus this week by a widely-discussed article by Martin Wolf in the Financial Times suggesting re-joining is highly unlikely any time soon, if ever. Other views are available, of course. But my point here, and of course I and many others have made it many times, is that for as long as there is a feasible scenario in which an incoming British government would seek to overturn any version of re-joining which might have occurred, such re-joining would never be countenanced by the EU. In this sense, the political battle for ‘anti-Brexiters’ for the time being is not to re-join, or even to try to persuade Labour to have a re-join policy, but to expunge Brexitism from British politics, or at least confine it to the margins.

Clearly things may play out differently. Even Wolf acknowledges the possibility that, say, a re-elected Trump pulling the US out of NATO would create such a geo-political shock that all bets would be off. So, too, might something as yet completely unforeseen, and perhaps (even) worse. But it would seem foolhardy, and even more pessimistic than Wolf himself, to work on that assumption when the scenario I have described is, for the time being, the more likely one.

On that cheery note, I’m signing off for Christmas and the New Year (unless something big happens). Many thanks to all who have read and publicized the blog this year and, in more recent months, left comments. I nearly decided to give up on it when I reached the seven-year mark, but here we still are. I’ll re-start early in 2024.

 

If you are stuck for a Christmas present for someone, why not buy them a copy of the updated edition of my book Brexit Unfolded. How no one got what they wanted (and why they were never going to), published by Biteback in September 2023?

Immigration and asylum rows are another sign of Brexit’s total failure

One of the reasons why there is still any debate about whether Brexit is a success or a failure is because what Brexit meant and what it was supposed to achieve were so obscure, and were made deliberately obscure by those who campaigned for it. The two things are linked, of course: there is no checklist against which we can evaluate Brexit as a policy because it was only by allowing Brexit to have multiple meanings that enough people could be persuaded to vote for it.

The fact that winning the referendum was only possible by not defining what was being voted for lies at the heart of almost all the trauma that has followed, most especially the protracted political agony over agreeing what it was going to mean in practice. This week, that was vividly illustrated by the government’s panicky new tightening of immigration criteria in response to the latest annual net migration figures and, then, by the latest, still ongoing, twists in its ‘Rwanda policy’ fiasco. But before coming to these events, it’s worth thinking about what preceded them.

Immigration control: a Brexit promise kept?

For well over a year now, Professor Jonathan Portes, one of the leading experts on the economics of migration, has been making the point that immigration policy is one of the very few areas where Brexit has delivered its promises. What he meant was that Vote Leave, unlike successive Tory governments, had never proposed any particular level or limit for immigration. Brexit had simply promised to give the UK control over setting the criteria for the entirety of its immigration policy, rather than just over immigration from non-EU countries, thus deciding for itself how many and what type of immigrants it needed. Wasn’t this exactly what Brexiters, including Nigel Farage, had demanded for years when championing an ‘Aussie-style points-based system’?

So here it was, and what it turned out to mean was just as high, or even higher, levels of immigration than before Brexit. And that was driven by choice and necessity. To give one important example, when the UK began setting its own immigration policy at the end of the Transition Period, it initially only allowed ‘senior care workers’ to be eligible for work visas. Then, in response to the worsening crisis in staffing social care, in February 2022 eligibility was extended to all grades of care workers. This, and the, on average, one dependant each care worker brought with them, was one of the main drivers of the high number of work-related visas issued in the latest figures. But it didn’t happen through carelessness or ‘losing control of our borders’: as with the rest of the work visa system, it happened as a deliberate choice in the face of a pressing need.

Post-Brexit control of immigration is not just about numbers. It has also meant a major change in the composition of immigration in that it is now much more heavily weighted towards non-EU countries than before. That, too, was in line with what Brexiters had called for and promised, including, again, Nigel Farage, when they fulminated against the unfairness of the situation where it was far easier for an EU citizen to work and live in the UK than for those from elsewhere in the world, especially the Commonwealth countries.

Indeed one strand of the leave campaign was aimed directly at minority ethnic groups, raising the grievance that their relatives faced so many hurdles in joining them whereas EU citizens faced, effectively, none. Thus the Vote Leave campaign produced leaflets (£) in Punjabi, Urdu and Hindi urging that leaving the EU “would help to stem the flow of Eastern Europeans into the UK – allowing more incomers from Commonwealth countries to take their place”. Some Brexiters, such as the Tory MP Daniel Kawczynski, even argued that EU Freedom of Movement rules were “racist”, and that “whether Indian or Romanian you should be treated the same”.

Or a Brexit promise broken?

So, in all of these ways, Portes and others have been quite justified in saying that Brexit really has delivered on its promises about immigration. But, of course, as they are no doubt well aware, they are also being cute. For there can be no doubt that many, perhaps even most, leave voters wanted and expected Brexit to mean immigration levels would reduce, and that by ‘control of our borders’ they meant, and thought Brexit campaigners meant, control in order to reduce immigration, not simply control regardless of how it was used.

Since the referendum, some Brexiters, including Boris Johnson, have sought to claim that immigration wasn’t really at issue, so much as the ‘principle’ of sovereignty. However, polls immediately after the referendum showed, yes, that for 49% of leave voters “the principle that decisions about the UK should be taken in the UK” (which can be taken to mean ‘sovereignty’) was their main motivation, but, even so, immigration control was the main motivation for 33% of them. In any case, the two motivations are likely to be intimately associated, with ‘sovereignty’, at least for some, likely to be mainly about, or at least to include, border control. Whatever may now be said, sovereignty was not an abstract principle but seen as a means to enact certain policies, including reducing immigration.

In all, it is hard to deny that many leavers, and surely enough of them to have made a decisive difference to the referendum outcome, thought, like this voter from Barnsley interviewed by Channel 4 News the day afterwards, that: “It’s all about immigration. It’s not about trade, or Europe, or anything like that. It’s all about immigration”. What may have been less common, but surely not that unusual, is what he went on to say, which caused the clip to attract much attention and some mockery: “It’s to stop Muslims coming into this country. It’s as simple as that”. He then went on: “The movement of people in Europe, fair enough but not from Africa, Syria, Iraq or anywhere else.”

There’s a lot to unpack in that, including the way it appears to approve of EU freedom of movement and, at least, the implication that, although immigrants from the EU might well be Muslims and those from outside the EU might well not be, this kind of voter is probably not likely to see the post-Brexit increase in non-EU immigration as having delivered what he wanted from Brexit. That would be consistent with research data showing that all voters, whether leave or remain, and regardless of social class or age, are more positive about EU immigrants than non-EU immigrants. Or, let’s be blunt, voters like ‘Barnsley man’ object far more to black and brown immigrants than they do to white immigrants.

Beyond that, there is a clear implication that for him, and it is hard to believe he was unusual in this respect, the issue of immigration was bound up with, and perhaps identical to, that of refugees and asylum seekers. If so, it is hardly surprising since the (unofficial) Leave.EU campaign, most notoriously with Farage’s ‘Breaking Point’ poster, deliberately and explicitly conflated these issues. But so, too, did the supposedly more ‘respectable’ Vote Leave campaign, even if in more ‘genteel’ terms.

Thus just before the referendum Boris Johnson issued a statement which began by waxing lyrical about how “pro-immigration” he was but – whenever Brexiters say something positive about immigration it’s always the prelude to a ‘but’ – bemoaning freedom of movement, along with the claim that “the rogue European Court now controls not just immigration policy but how we implement asylum policy under the Charter of Fundamental Rights”. Like the Barnsley voter, he even mentions Syria and Iraq, in an implicit reference to the supposed possibility of Turkish accession to the EU.

The conflation of immigration and asylum

Against this background, what is happening with immigration policy now is hardly surprising. It may have seemed that Brexit had largely removed immigration from public concern and political attention. Between June 2015 and July 2016 ‘Immigration and Asylum’ topped the public’s list of the three most important issues facing the country, peaking at 71% in September 2015 – presumably in response to the European ‘migrant crisis’ – and still 56% at the time of the referendum. It then steadily fell to being named by just 14% as a top-three issue in April 2020 before gradually rising again so that 40% now see it as a top-three issue, the highest score apart from ‘the economy’ and ‘health’.

But even that survey question is part of the problem. Immigration and asylum are not the same thing, and if they are conflated in the public mind then it is because they are conflated by political leaders. Not only that, but it is highly likely that growing public perception of ‘Immigration and Asylum’ being a problem issue is to do with the further conflation between asylum-seeking and ‘illegal’ (i.e., irregular) asylum-seeking, and especially the ‘small boats’, which itself is different from, though often conflated with, ‘illegal immigration’.

Matters are further confused, and public understanding confounded, by the way that the headline figures for immigration agglomerate the numbers for work visas and their dependants, student visas and their dependants, asylum seekers and, which is different again, refugees. Indeed, one reason for the recent spike in aggregate figures is the arrival of those fleeing war in Ukraine and tyranny in Hong Kong, something which has strong public support and also contributes to advancing the UK’s geo-political interests.

It is in this sense that this week’s government clampdown on immigration was panicky. Far from being a calm, rational assessment by a sovereign nation of what controls are needed in the national interest, economic and otherwise – the supposed promise of Brexit Global Britain – it was a rushed botch driven by Sunak’s fear of the Reform Party vote and of his NatCon backbenchers.

The result is a ‘five-point plan’ (is there any other sort?) which will hobble British businesses, damage the ‘world-class universities’ the Tories so often boast of and which are themselves one of the country’s most successful service exporters, exacerbate the crisis in social care, and, most cruelly of all, make international marriages something only available to the well-off (though the latter seems so badly thought out it’s quite likely to be dropped). What makes this plan all the more lamentable is that, for all the damage it will do, it almost certainly won’t even deliver a fillip to the Tory standing in the opinion polls. Within hours, Richard Tice, the notional leader of Farage’s Reform Party company, had denounced it, with yawn-inducing predictability, as a “betrayal” (£).

It certainly won’t slake the unquenchable thirst of the Tory populists for even tighter immigration controls, and for derogation from the European Convention on Human Rights (ECHR) and, again, that was set up by the dishonesty of the Brexit campaign. For, in advocating freedom from, as Johnson put it, “the rogue European Court”, the Brexiters deliberately conflated the European Court of Justice (ECJ) with the European Court of Human Rights (ECtHR), which adjudicates the ECHR, and is quite separate from the EU. Certainly, prior to the referendum, every single time I heard leave-inclined voters give an example of EU Courts or EU law over-riding Britain’s Parliament or legal system it was something relating to the ECHR and ECtHR (and, often, some garbled version of it, such as that illegal immigrants couldn’t be deported if they had a pet cat).

Brexit pain with no Brexit gain

So we’ve gone through all the pain of Brexit, which was supposed to settle the immigration issue, for this – well, what should we call it? Grotesque stupidity and vileness are as good words as any. The tragedy is that in the process we have lost EU freedom of movement (FOM), and it is a tragedy which has many parts. One is simply economic. FOM is a highly flexible, non-bureaucratic way of matching jobs and workers. But FOM did so much more than that, enabling study, retirement, and romantic and family relationships. This meant that FOM wasn’t just an economic exchange, which ought to matter especially to those who profess to be concerned that immigration damages ‘community cohesion’.

We lost all this partly because of the conflation of FOM with asylum seekers and refugees, and partly for two deeper, and deeply related, reasons. One was the persistent failure of Brexiters to understand the difference between the Single Market and a Free Trade Agreement. In brief, this meant that they thought that FOM was just some kind of ‘ideological’ add-on by the EU, whereas in fact it is a central and irreducible component, making the four freedoms of the single market indivisible. Indeed, this failure of understanding was not confined to Brexiters, as shown by an interesting insider account of the referendum campaign, written by Daniel Korski, formerly Deputy Director of David Cameron’s Policy Unit. He records the frustration during the pre-referendum re-negotiation with the EU:   

“Nor would our counterparts in Europe acknowledge that the EU’s four freedoms are very much divisible. A country can reduce tariffs and remove trade barriers and still maintain restrictions on which foreigners are allowed to enter the country. This is what the United States has done since World War II, with NAFTA being the best example.” 

This ignorance came in time to inform the fantasy that a Free Trade Agreement could be a substitute for single market membership, but it had another consequence. Understood as a single market, it makes no more sense to talk about immigration between member countries than it does to do so between counties in Britain. This was alluded to by Sir Ivan Rogers in his February 2017 evidence to the House of Commons Exiting the EU Committee (p.10): 

“They [the rest of the EU] genuinely do not understand a UK debate in which the two are conflated at all. They do not understand why a government would have a migration target covering migration from within the European Union, which for other people is not migration. They do not call it migration; they do not call it immigration. They call it free movement… [t]hey said, “But one is migration, which is external to the European Union, and the other is free movement of people, which is not at all the same thing.” 

These two aspects of failing to understand the meaning of a single market are linked in resting on a simplistic understanding of borders. In relation to trade, that led to seeing the elimination of tariffs, rather than cross-border regulation, as being the main issue, and an associated mental model of trade as the one-time movement of finished goods from one country to another, thus ignoring modern cross-border supply chains as well as services trade. Similarly, immigration was seen as being a kind of mechanistic one-time move from living in one country to another, as well as being a solely economic transaction.

In fact, although freedom of movement of workers has been a concept going back to the original provisions of the 1957 Treaty of Rome, and is very much associated with what was the common market, it has evolved to become a freedom of movement of persons for EU citizens. At all events, what FOM allowed in practice was not just economic flexibility but a huge personal flexibility whereby, for example, a young person might go to another country for a few years to work or study, with no need or intention to settle there permanently. Or a couple comprising different nationalities but both holding EU citizenship could move between their respective countries of birth, or to any other EU country, at different times according not just to their jobs but, say, their children’s education or to look after their parents. It is that richness of interchange that the UK has deprived itself of and, of course, deprived its own citizens of.

Small boat psychosis

Meanwhile, the festering grievance about ‘illegal migrants’ has grown since Brexit, starting with the confected outrage and alarmism about the ‘small boats’ whipped up initially by Farage to become an almost incontrollable Tory psychosis. Psychosis may seem like a strong word, but I think it is apt when the former Home Secretary Suella Braverman talks, as she did this week, of “the crisis … of mass uncontrolled illegal immigration … pouring into our country … break[ing] in to Britain … putting unsustainable pressure on public finances and public services … jeopardising national security ...” Such hyperbolic language is completely disproportionate to the scale of what is actually happening. And it is not just Braverman. When Immigration Minister Robert Jenrick resigned this week, he wrote of how “the small boats crisis is a national emergency that is doing untold damage to our country”, and in referring to the Rwanda Bill as “emergency legislation”, needed because a “reasonable country” has been pushed to the limits of its patience, Sunak is complicit in the psychosis.

In fact, since 2018, about 100,000 people have made the ‘small boat crossings’, peaking at about 46,000 in 2022 and numbering just over 27,000 this year (as at 13 November 2023). By international standards, those are not huge figures and they certainly don’t constitute “a national emergency” in any sensible meaning of the term. The crisis, if there is one, is in the government’s inability to undertake the basic administrative task of creating a fair and rapid claims-processing system, and its dogmatic refusal to create adequate safe routes for claims to be made. Moreover, the small boat crossings are, at least in part, a problem which has been exacerbated by Brexit and, certainly, they are evidence that the Brexiter claim that leaving the EU would reduce or eliminate such problems was a lie.

Within this context, the Rwanda policy over which Jenrick resigned, and which may now conceivably bring Sunak’s government down, is especially mad. For one thing, even if it were ever implemented, it would have only the tiniest impact on the processing of asylum claims, and little, possibly no, impact on small boat numbers. For another, it shows a distinctly Brexitist logic, most ludicrously in the idea that passing a law which declares that Rwanda is a safe country will make it a safe country – the legislation is actually called the Safety of Rwanda Bill – the latest example of the idea that falsity can be willed into becoming truth.

More ominously, it is the latest and by far the most serious example of how Brexit has led the UK into seeing international law as something of no account, at least for itself, an aspect of Brexitism which first emerged with the proposal to break international law with the Internal Market Bill. Indeed, its notable that Jenrick, who once practised as a solicitor, resigned because the latest Rwanda legislation did not go far enough in discarding international law. Meanwhile, in perhaps the most extraordinary twist so far, the Rwandan government has issued a statement suggesting it might pull out of the whole deal if it involves the UK being in breach of international law!

Brexit’s utter failure

Any lingering hope that Brexit would finally lay to bed all the fear and panic about ‘uncontrolled immigration’ and ‘bogus asylum seekers’ must surely now be dead. Instead, it lives on in ever-more vicious and hysterical ways. The Brexiters said that all they wanted was to control who came to the UK, but that was a lie. They said that they just wanted to ensure that only those with the skills needed to contribute to the economy, but that was a lie.

As with every other Brexiter demand, whatever they are given they always say it hasn’t been done in the right way and they always, always want more. On asylum policy, Sunak is just the latest Tory Prime Minister to find that even adopting totally unworkable and abhorrent policies will not placate them. It will never be enough to be ‘true Brexit’ or ‘true Conservatism’, though he has added to his woes by being politically unskilled enough to tie his fate to making an unworkable policy work.

In 2017, Dominic Cummings said “The single most important reason, really, for why I wanted to get out of the EU is I think that it will drain the poison of a lot of political debates … UKIP and Nigel Farage would be finished … Once there’s democratic control of immigration policy, immigration will go back to being a second- or third-order issue.” This idea, still sometimes expressed by well-meaning liberals (£), that Brexit spiked the guns of far-right and populist politics in Britain, defusing its demands by attending to its grievances, has proved utterly false. On the contrary, and not just in relation to immigration and asylum, it has made such politics mainstream. In this, as in every other way, Brexit has utterly failed.

Should Labour be bolder about Brexit?

One of the benefits of having re-enabled comments on this blog, to me at least, is to be able to see what issues get flagged up by readers as interesting or debatable. Last week’s post was mainly about the government’s Autumn Statement, but many of the comments focused on my far briefer observations about Labour’s post-Brexit policy. I have written about that at length in the past, but it is clearly an issue which is becoming more pressing as the next election gets closer, with some recent well-informed speculation (though that is all it is) that it could be as early as May 2024. And, of course, recent and current opinion polls suggest that Labour will win, which also adds salience to the question of how they would approach the UK-EU relationship in government.

Curtice’s analysis of the Labour vote

This issue has also been getting fresh attention because of recent remarks by the eminent polling expert Professor Sir John Curtice about the structure of current voter support for Labour. He suggests, in quite forceful terms, that “Labour’s presumption that they couldn’t get into an election winning position without fundamentally changing the character of their support vis à vis Brexit has been demonstrated to be false”. He makes three key points to explain and justify that. First, that those 2016 leave voters whose support Labour have gained since the 2019 election are atypical leave voters in that they tend to be those who now support re-joining the EU. Second, in line with general shifts against support for Brexit, those people who did vote Labour in 2019 are even more likely to be opposed to Brexit now than they were then. And, third, new voters, who were too young to vote in 2016 and/or 2019 are overwhelming pro-Labour and anti-Brexit.

The implication of this might be (I am not sure that Curtice has said this in terms, but it is certainly the conclusion that many are drawing from what he said) that Labour could have adopted, and could still adopt, a more strongly anti-Brexit position without threatening its chances of winning the election. That would, presumably, mean adopting a policy of seeking to re-join the EU or, at least, the single market (and/or entering into a comprehensive customs union with the EU). On Curtice’s analysis, such a policy would go with the grain of most of those intending to vote Labour. It would also (this is my view, not what Curtice said) be a far more credible economic policy because of the now strong evidence, discussed in my previous post, of the damage Brexit has done, and will continue to do, to growth and investment.

Economics and honesty

The economic argument appears to me to be unassailable, and as I observed last week it is quite dishonest for Labour to suggest that any changes that could realistically be made to the existing Trade and Cooperation Agreement (TCA) would make much economic difference. Labour’s proposals shouldn’t be entirely dismissed, though, as they will smooth some of the roughest edges of what Frost and Johnson agreed. There is also some validity in Labour’s argument that, from the perspective of investment, there is a value simply in providing stability and consistency. That was the message from business (£) at this week’s ‘global investment summit’, and Labour’s commitment to maintaining regulatory alignment with the EU speaks to that. There is also value in possible improvement to security cooperation, and in a general improvement in the tone of relations with the EU. But the benefits of what can be done within the TCA framework shouldn’t be over-stated.

That doesn’t mean getting het up about Labour’s ‘make Brexit work’ slogan which, vapid and irritating as it is, is no more than slogan. Nor is it to make the common criticism that Starmer is indulging in ‘cakeism’ with his proposals. That is off-beam, in that things like a Sanitary and Phyto-Sanitary (SPS) or Veterinary deal, a TCA mobility chapter, and a security pact have been on offer from the EU in that past, and if Starmer pursues them it will be on a something-for-something basis, not the something-for-nothing which defines cakeism. But, as someone commenting on last week’s post under the name ‘El Fred’ put it, it could be regarded as a kind of ‘shrinkflated cupcakeism’ if that means that Starmer is at least implying that it would be possible to yield significantly larger benefits without changing the fundamental structure of the TCA.

One issue here, economics aside, is simply that it would be a refreshing antidote to the years of political dishonesty about Brexit if Labour were to tell the truth. After all, it is dishonesty which got us into this Brexit mess and, whether in relation to Brexit or anything else, it is honesty which the public say is what they most want from politicians. At the least, honesty would mean Labour being open about the fact that their post-Brexit proposals will make very little economic difference. But, refreshing as that might be, it would not be a viable policy position in itself, since it would invite the obvious demand for them to develop proposals which would make such a difference. That takes us back, then, to some version of ‘rejoining’, with the implication of the Curtice analysis being that this would not preclude Labour being in an election-winning position.

Could Labour change policy?

I don’t question for a moment that Curtice is right in his account of the structure of the Labour vote. But I’m not convinced that it carries the implication that Labour could adopt some version of a re-join policy without suffering electorally. One problem is just that there may be a difference between the overall structure of the Labour vote, as outlined by Curtice, and its structure within particular Labour marginal seats and Labour target seats. I don’t know, and it would only be possible to know through constituency-level polling. But I assume Labour conduct such polling and, if so, perhaps it is this which explains their stance but, of course, the results of these polls are not in the public domain.

Leaving that speculation aside, for Labour to espouse any version of re-joining would not just be one policy amongst others, an uncontroversial addition to their existing proposals. It would inevitably become the major focus of the campaign, overwhelming every other debate. That would carry huge dangers for Labour because, despite what Curtice says about the structure of their vote, it doesn’t follow that voters who support re-join see this as the central political issue, or that they would support another referendum, which would certainly be a necessary prelude to re-joining the EU or even the single market [1].

On the first point, of course some Labour voters do see Brexit as the major issue, but there will be many shades of strength of feeling about that, even amongst some who would vote to re-join. Remainers and re-joiners are not a homogenous group, and most readers (as well as the writer!) of this blog are hardly likely to be representative of them. So the danger for Labour is that they are seen as ‘banging on about Brexit’ when it is not the priority issue for the voters. The LibDems (although for them the electoral calculations will be different) also seem alert to this danger. For, indeed, current polls show that only 15% of the electorate think ‘leaving the EU’ is amongst the top three issues facing the country, and just 13% of the 18-24 age group do so. Even amongst 2016 remain voters the figure is only 22%, amongst LibDem voters it is 23% and amongst Labour voters it is 20%. It’s true that the issue that does most concern voters, ‘the economy’, is inextricably bound up with Brexit, as are some of the others, but it doesn’t follow that voters see it in those terms or, if they do, that they see it as the main factor.

On the second point, recent polling evidence suggests that only 39% of the population support another referendum being held in the next five years. That rises sharply to 63% amongst those who intend to vote Labour but, also amongst Labour-intending voters, 25% are opposed to such a referendum (the split amongst 2016 remain voters is almost identical). Even looking two terms ahead, to a referendum within the next ten years, the figures remain similar at 69% and 17% [2]. Again, it’s not clear what strength of feeling attaches to these views, but there must be at least some who are opposed to another referendum so strongly that the prospect of one would dissuade them from voting Labour, and at least some, perhaps many, who are in favour but whose support for it is fairly lukewarm, at least to the extent of not regarding it as a priority for the next Labour government.

How would changing Labour’s policy affect the Tory vote?

There’s another important campaign issue in this which Curtice’s analysis ignores (or, at least, it does in the clip I am discussing). Labour’s Brexit position is not just about the structure of the Labour vote, it also affects the structure of the opposition vote. If Labour put forward a re-join policy, that would enable the Tories to re-group and rally around a ‘defend Brexit’ campaign, galvanizing its core vote and, in particular, making it much easier for them to hoover up Reform Party voters who, as the opinion polls stand, look set to split the right-wing, Brexit-supporting vote. For these are voters to whom Brexit really is a defining issue.

At the moment, attempts to give a ‘vote Farage, get Starmer’ message to such voters have little chance of success. They don’t loathe Starmer as they did Corbyn, and they think Labour are probably going to win in any case. So they have a free-hit protest vote against Rishi Sunak, who they don’t regard as ‘real Conservative’ anyway. But the moment Labour adopted a re-join policy all that would change, and with current opinion polls giving Reform as much as 10% of the vote that could have a big effect. Perhaps that effect would be enough to keep Labour out of power but, even if not, then it would certainly be enough to reduce its majority, and enough to stave off a possible Tory wipe-out.

This point, just on its own, makes Labour’s stance explicable, and might also carry weight with those rejoin voters tempted to ‘punish’ Labour for the insufficiency of its Brexit policy. There is a real, epochal chance for the Tory Party to be not just defeated but annihilated in the election. It’s a chance that actually arises from Brexit itself, in that it is this which has created a schism in the electoral coalition between ideologues and pragmatists that normally holds the British right together. Small wonder that Labour don’t want to squander the possibility of such a prize by gifting the Tories a way of preventing such a schism.

What would changing policy mean for a Labour government?

This reasoning becomes all the stronger by considering what would it mean for Labour in government, even assuming it could win an election on a re-join platform. That could only mean re-joining becoming the dominant political issue for its entire first term, and an issue where success could by no means be guaranteed. It would mean holding another referendum with all that, by now, we surely know that entails for marginalizing every other issue. And it would mean winning it, which is far from certain especially if, as would surely be vital to settle the matter, it was this time held on the basis of a super-majority being needed.

Then, if all that was achieved, it would just be the beginning of a prolonged process of application to join, an application which might well fail. For, as has so often been pointed out, the EU, and its individual members, are likely to have grave reservations about UK membership. Those reservations would be all the greater if the referendum were again held as a simple majority vote, and that vote was only narrowly to re-join. But even a super-majority would not in itself eradicate the fear that, in a few years, with a new government, the UK would change its mind again. And even if that hurdle were overcome, the accession process would take time, and might not be completed by the end of Labour’s term of office. So it would go into the following election without having delivered its flagship policy.

A better approach?

Taken together, these arguments provide a strong case for the approach Labour have adopted. Where I think they have made a serious mistake is in being so dogmatic in opposing any form of re-joining, ever. It is easy to understand why, because the Tories would have exploited any ambivalence in order to claim that Labour has a ‘secret plan’ to re-join. They have tried that anyway (£), but it has had little traction precisely because it is so clear that there is no such plan. And, by the way, the Tories’ attempts in this regard give further weight to the point that, from their point of view, a Labour re-join policy would be an electoral boon, and perhaps the only thing that can save them.

However, understandable as the dogmatism of permanently ruling out re-joining may be, it has created a nasty straitjacket for the future. As I argued exactly a year ago, I think a better policy would have been to say that re-joining would have to await a strong popular and cross-party consensus, putting the responsibility with the Tories, where it properly lies, and, in the meantime, to propose improving the TCA, if possible, without over-claiming for its economic effects. This would have the virtue of honesty, an honesty which would also provide the political justification for the limitations of Labour’s policy.

Facing up to reality

With all this said, whatever I think, or whatever anyone may think of the arguments in this post, what seems unarguable is that Labour are not going to change their current Brexit position, and that becomes all the more so the closer the election gets. Even if it isn’t until the end of next year, there just isn’t time to make, communicate, and consolidate support for such a change. So, even if it is true that Starmer could or should have had a bolder position from the outset, it isn’t going to happen now.

Thus, like it or not, for voters dissatisfied with, or even disgusted by, the current position the choice will be whether to use their vote to make a Labour government or a Conservative government more likely (I phrase it that way as, in different constituencies, the voting implication of that will be different). Of course, that choice isn’t just about Brexit, but, on Brexit, even given the limitations of Labour’s policy it would be wrong to think that there is no difference between them and the Conservatives, so it’s a choice that matters and, anyway, it’s the only choice that is going to be on offer.

In a sense, the choice facing the most committed re-joiners is the mirror-image of that facing the most committed leavers. The latter have the choice of voting for what, in their terms, would be the Brexit purism of the Reform Party or the hopelessly compromised and deeply suspect Conservative Party. At the moment, it looks as if enough will choose ‘purity’ to keep the Conservatives from power. The choice on the other side, for ‘purist re-joiners’, is whether they want to do the same to Labour.

 

Notes

[1] There is a view sometimes expressed amongst advocates of single market (SM) membership that re-joining that, rather than the EU, would not require a referendum. There are three variants of that view. One is that, unlike EU membership, SM membership would not be a constitutional change. The second is that SM membership would have been compatible with the 2016 referendum result, and so would not require another referendum. The third is that, if Labour won an election on a rejoin SM policy, that would provide all the mandate needed.

All three versions, even if legally correct (which is arguable), are hopelessly naïve politically (in ways reminiscent of the LibDems’ ‘revoke Article 50’ policy in 2019 which, as I argued at the time, was deeply flawed both in principle and as a political tactic and strategy). For one thing, they all imply that it would be legitimate for a future Tory government to reverse policy, which also makes it an unappealing prospect for the EU/ EFTA. But that is part of a bigger issue: whatever we now do, it surely has to be permanent, and needs to be unequivocally seen as legitimate, rather than achieved by what is, or could easily be represented as, some sleight-of-hand or trickery. The Brexiters failed to achieve that, even with a referendum. If they had succeeded, we wouldn’t even be debating these matters any more. So if we have learnt nothing else from them, and from the Brexit saga generally, it is that such a mistake can never be repeated.

[2] This poll also shows that support for an immediate referendum is much weaker, with only 42% in favour and 48% against amongst Labour-intending voters (and almost exactly the same amongst 2016 remain voters). But it’s not clear what weight to put on that as the question was about a referendum “in 2023”, a pretty absurd one given that it was asked in August 2023. So I think the five- and ten-year questions I’ve referred to are the more important ones. Even so, the answer to the ‘in 2023’ question does underscore the point that support for re-join if there were to be another referendum is the not the same as support for attempting to re-join by holding another referendum.

An Autumn Statement of Britain's foregone future

The staggering success of Brexit in transforming Britain’s economic prospects has been such that in his Autumn Statement speech the Chancellor mentioned it, well, just once, and that to refer to the fatuous “Brexit Pubs Guarantee”. This is the policy, first trailed in Rishi Sunak’s 2021 budget, and which came into force last August, whereby duty on a pint of beer bought in a pub is guaranteed to be less than when bought in a shop. As Brexit benefits go, this might be thought rather meagre but, in fact, it’s not even a Brexit benefit, as it could have been done whilst being a member in the EU.

The reticence was scarcely surprising, though. In making a statement putting heavy emphasis on the need to boost business investment, Jeremy Hunt could hardly mention that, just the day before, the Deputy Governor of the Bank of England had told the Commons Treasury Select Committee that the decision to leave the EU had “chilled business investment” ever since the referendum. Nor, in putting heavy emphasis on the need for economic growth, was he likely to refer to the Office for Budget Responsibility’s (OBR) forecast from April 2023 that Brexit will cause UK GDP to be 4% a year lower than it would otherwise have been by 2035, even though that forecast was explicitly left unchanged in its analysis accompanying this Autumn Statement.

Hunt certainly wasn’t likely to challenge the OBR’s estimate, as Trade Secretary Kami Badenoch did the other week, since one of the big lessons learnt from Truss’s mini-budget catastrophe, which brought him to the Treasury, is that the OBR’s forecasts are crucial to gain market legitimacy. So trying to pick holes in one of those forecasts would open a can of worms that every Chancellor who follows the hapless Kwasi Kwarteng will want to remain tightly closed.

The long hand of Trussonomics

That is a reminder that, although it seems a long time ago, it is only a year since Truss’s ‘true Brexit budget’ (£) meltdown and the first Sunak-Hunt Autumn Statement that followed. At that time, I wrote that the effect of those events was to begin to break the silence about the economic damage of Brexit. That was true, so far as it went, although it hasn’t persisted to the same degree, perhaps in part because Brexit has been subsumed into the long list of things about which, as I wrote more recently, we ‘mustn’t grumble’.

It’s not just that, though. Opinion polls show that in October 2022, following the Truss debacle, 57% thought that Brexit has made the UK economy weaker than it would have been, and 11% that Brexit has made the economy stronger than it would have been, a lead for 46 percentage points for ‘weaker’, which was the highest recorded since the question was first asked in February 2022. However, in the most recent iteration of this poll, in October 2023, 49% thought ‘weaker’ and 21% thought stronger. At 28 percentage points that is still a considerable lead, but it has not only declined since its high point in October 2022 it is also the smallest lead recorded in any of the polls since the question was first asked. (The numbers responding ‘similar’ or ‘don’t know’ have remained stable throughout, at around 20% and 12% respectively).

So it looks as if the Truss mini-budget did indeed have an impact on public debate and public views about the economics of Brexit, but that this has since diminished. One reason is probably just the passage of time since the mini-budget crisis, and declining media interest in Brexit. But another may be because of the extent to which, in Conservative circles, the belief that Truss was essentially right has endured or even grown. It may not be surprising that this belief was expressed just this week by Patrick Minford (£), the ever-deluded chief economic cheerleader for Brexit and prime intellectual architect of the Truss budget. Nor is it precisely a shock that Truss herself, whose qualities do not self-evidently include that of deep introspection, should not just regard herself as blameless but in recent months have appointed herself as the standard-bearer for a ‘true Conservative’ economic policy of tax cuts and small government. But it is more surprising, given the damage she did not just to the economy but to their chances of re-election, that “so many Tories still love the failed leader”, to quote part of the headline of an insightful recent article by the Guardian’s Zoe Williams which seeks to explain Truss’s “astounding return”.

Part of Williams’ explanation relates to Brexit. She suggests that Truss and her supporters have mobilized its recurrent victimhood motif to present her as not having failed but as having been destroyed by the forces of the Blob, the Establishment – that amorphous conglomerate which, to explain Truss’s demise, has to extend even to bond market traders. This is all part of the increasingly dangerous contemporary British version of the ‘stab-in-the-back myth’ that played such an odious part in German politics after the First World War. It was on display again last week in the aftermath of Suella Braverman’s resignation.

At all events, it won’t have been lost upon Rishi Sunak that Truss’s ‘Great British Growth Rally’ upstaged him at the Tory Party’s conference, and that tax cuts are one way that he might throw some red meat to his many critics. Indeed, he even had the gall to suggest (£) that the lesson of Truss’s budget chaos lay not for the Tories but for Labour’s “dangerous” green investment plans. In any case, one of the few things known about Sunak is that he wants to be seen as an ‘instinctive tax-cutter’ and his political hero is Nigel Lawson, Thatcher’s Chancellor in the 1980s

In this way, there is now a peculiar alignment within which tax cuts are seen as symbolic both of defiance of Establishment orthodoxy and of fealty to Thatcherite orthodoxy. So it’s not surprising that Sunak and Hunt conjured some up, even if they relied on a smoke and mirrors trickery that was concisely exposed by Paul Johnson of the Institute for Fiscal Studies, and were based less on any serious economic analysis and more on a desire to lay political traps for Labour at the coming election.

Certainly the right-wing press was quick to latch on to this alignment, with both the Mail and the Telegraph carrying the identical front-page headline “Biggest tax cuts since the 1980s”. The Telegraph front page also prominently featured five pundits who it promised would provide “the best comment and analysis”. Of these, one was Allister Heath, who last year lauded Kwarteng (£) for “delivering the best budget I have ever heard a British Chancellor deliver, by a massive margin”, whilst another was none other than Kwarteng himself. Truly, the best comment and analysis anyone could imagine.

The scale of the economic damage of Brexit

Nevertheless, unlike the architects of the mini-budget, neither Sunak nor Hunt could even begin to try to pretend that the Autumn Statement was about ‘delivering Brexit’, any more than they could admit how constrained it was by the ongoing damage of Brexit, the leaden divers’ boots dragging down Britain’s economy.

Further evidence of this was provided by last week’s report from the National Institute for Economic and Social Research (NIESR), entitled Revisiting the Effects of Brexit. The first line of its conclusion is that “overall, it is certain that Brexit has had a significant effect on the British economy” [my emphasis added], and the ‘headline’ summary of that effect is that, coming up to three years after the end of the transition period, UK real GDP is between 2% and 3% lower than it would have been compared with if Brexit had not occurred, and that it is forecast to be between 5% and 6% lower than it would have been by 2035 (thus, even worse than the OBR forecast of 4%). This equates to £850 per capita and £2,300 per capita respectively. The main reasons for this are the impacts on investment, productivity, and UK-EU trade.

There are several things to say about these findings. First, they are based on modelling different scenarios and, in doing so, the impact attributed to Brexit is stripped out from the impact of other shocks, primarily those of Covid and of the Ukraine War. This also means they are based on a form of ‘counterfactual modelling’ (i.e. comparing what has actually happened so far and what is forecast to happen with what might, in other scenarios, have happened or have been forecast to happen). As such, they are, of necessity, estimates but – unlike the constant attempts by pro-Brexit economists to assess the impact of Brexit by comparing actual UK performance with actual EU, Eurozone, or individual member state performance – they do address the central relevant question: is the UK economically better off or worse off outside the EU than it would have been within the EU? By definition, this question can only be answered in counterfactual terms, and of course it is the same question as that asked in the opinion polls I referred to earlier.

The NIESR model is, however, a different to another kind of counterfactual model, the widely-quoted ‘doppelgänger’ produced by John Springford of the Centre for European Reform (CER) and, in fact, it suggests that Brexit has not been as damaging as the CER model estimates. Thus the last iteration of the CER doppelgänger showed UK GDP to be 5.5% lower than it would have been by June 2022, whereas NIESR shows it to be 2.5% lower by 2023.* It should go without saying that either figure may be right, or that the true figure may be even higher than the highest estimate, or lower than the lowest estimate, but for the time being, at least, these are the best estimates available. It should also go without saying that, on any of these estimates, it represents a huge economic hit. To get a sense of its magnitude, consider that in 2019-2020 (i.e. before the pandemic created big distortions in public finances), the UK spent 1.9% of GDP on defence, 4.2% on education and 5.8% on pensioner benefits.

It's important to understand two things about the NIESR, CER and OBR estimates. One is that people sometimes wrongly think – and, when that happens, Brexiters suddenly become sticklers for analytical rigour – that these are estimates of absolute falls in GDP. They are not, they are estimates of lost growth in GDP that would otherwise have occurred. In that sense they are about a kind of invisible immiseration, the loss of what might have been. The second is that people sometimes think – and Brexiters collude in this when they talk about the Brexit impact as being one of ‘temporary adjustment’ – that what is being estimated is a one-off event. It is not. Rather, each year, every year, actual GDP is lower than it would otherwise be, with the gap between what is and what might have been gradually increasing. In that sense they are about a kind of compound invisible immiseration.

It's also important to repeat that all these studies do seek to strip out Brexit from other effects, and in doing so they recognize that the UK economy – including the specific issues of trade performance and productivity – faces many challenges other than Brexit, including some that pre-dated Brexit. This matters when reading, for example, another recent report, this time from the Boston Consulting Group (BCG) about UK trade performance and policy. For this report, whilst making many good points about the non-Brexit challenges, still finds it necessary to repeatedly make the strawman claim that “most commentary” ascribes the challenges facing UK trade to the single factor of Brexit. In fact, it is hard to think of a single serious commentator on trade or economics who does this, and, manifestly, the NIESR, OBR and CER do not.

The issue about the economic studies is simply that, as the BCG report itself states in relation to trade, although without attempting to quantify it, “Brexit has undoubtedly had a significant impact”. Quantification is useful in estimating the extent of that impact but, fundamentally, the point is that whatever other factors are in play, in a world where economic growth is hard to find, Britain, uniquely, has chosen to make it significantly harder by the addition of Brexit to these other factors. For another way to contextualize the magnitude of estimates of lost GDP growth, such as the NIESR figure of 2.5% for 2023, is to compare them with the latest OBR forecasts of what GDP growth will be: 0.6% (2023), 0.7% (2024), 1.4% (2025).

The bitter legacy of Brexit for SMEs

The BCG report also rightly highlights that the impact of Brexit has varied between sectors, identifying pharmaceutical and automotive industries as amongst those where Brexit “is likely to have been a major factor in reducing trade”. Perhaps the most important distinction to be drawn is between large and very large businesses, on the one hand, and small and medium-sized enterprises (SMEs) on the other. The reasons are fairly obvious. Larger firms had the resources to plan for and implement the changes that Brexit brought, and were often more likely to already be familiar with procedures for trading outside the single market.

There has been ample survey evidence of how hard SMEs have been hit by Brexit, and the negative impact on specific sectors and businesses has been assiduously chronicled by Peter Foster of the Financial Times, most recently in his report on the cosmetics and beauty sector (£), itself partly based on a study conducted by Oxford Economics for the British Beauty Council. Amongst other things, Foster’s report spells out that the impact of Brexit is an ongoing one, not simply a ‘shock’ to which firms ‘adjust’ – although, in some cases, it has been just that, with the adjustment being to cease trading with the EU or to cease business altogether. Yet Hunt, despite emphasizing the need to support small businesses, had nothing to say about this.

The particular impact on SMEs is sometimes acknowledged by Brexiters, such as in the recent Institute of Economic Affairs report by pro-Brexit economist Catherine McBride (aptly described by Professor Gerhard Schnyder as “a truly fascinating piece of post-truth economics”, this is what Badenoch based her critique of the OBR forecast on). But they typically downplay its significance on the basis that, precisely because they are small, the aggregate economic effect of that impact is small.

This is misguided in two ways. One is that although big firms may be better placed to deal with Brexit this doesn’t mean, as McBride blithely puts it, that they “can easily absorb any additional costs”. It is rather that, as Allianz Trade’s Head of Economic Research recently said, Brexit has “become a structural hurdle for UK exports” (the same is true of imports, and will become even more so if the latest promise to introduce UK-EU import controls next January is kept). Many big firms may indeed ‘absorb’ these costs, but they are still real, impacting on competitiveness, prices, employment, tax base or any number of other things. But it is also misguided because of the particular economic, social, communal and, indeed, emotional and psychological costs of Brexit’s impact on SMEs.

Those costs are well-illustrated in Foster’s reports, including the one on the beauty industry, which also illustrates the micro-level equivalent of the counterfactual issue in the aggregate modelling. For, as he says of Apothecary 17, a small Doncaster-based maker of male personal grooming products, the issue is not so much that it has adjusted to now being a domestically focused business, it is the ‘counterfactual’ that it might otherwise have continued to expand as an international business. That in turn has implications for the people it might have employed, the foreign currency it might have earned, the taxes it might have paid, and its resilience in the event of a domestic downturn.

There are numerous similar examples highlighted in Brexit and Businesses: In their own words, a recent European Movement (EM) report in which, along with survey results, individual SME owners and managers explain what Brexit has meant for them. Issues include not just the new complexities of trade and regulatory change, but labour shortages. Here, too, it is important to understand how SMEs often struggle more than large businesses because, although net migration figures remain at similar levels to before Brexit, the costs and bureaucracy of hiring workers from overseas are far greater than was the case under freedom of movement of people within the EU. Moreover, sectors like hospitality which are more likely to need workers who don’t qualify for visas are also more likely to have large numbers of small firms within them.

Sometimes, the profiles in the EM report are painful to read, as with that of Carol, who ran a niche bridal lingerie business in Devon. The last line is “Brexit was the final nail in the coffin of the business” (p. 12). Or that of Darren, who ran a specialist motorsport vehicle engineering firm in Cornwall and Essex. His profile concludes “our business is finished” (p. 17). These are affecting, personal stories of individual dreams shattered, whilst at the same time implicitly telling of damage to whole families and to local communities, often in ‘left-behind areas’.

It is ironic to think how fervently Tory politicians used to, and still sometimes do, declaim themselves to be the party of entrepreneurs, and to insist that small businesses were the bedrock of the British economy, and yet they presided over Brexit. Ironic, too, how so many Brexiters claimed that it was only ‘big Business’ that felt threatened by Brexit, and what mattered were the true, British, salt of the earth, small businesses, and yet now dismiss the effects on SMEs as all but irrelevant because big Business has been more able to weather the Brexit storm.

Britain limps on

Back, then, to this week’s Autumn Statement, when it was clear, though again not surprising, that the Labour Party are as taciturn as the government about the damage of Brexit. Thus Shadow Chancellor Rachel Reeves’ response speech made no mention of it at all. As if it were the seedy uncle who has to be tolerated at family get-togethers, everyone is too embarrassed to comment on the dubiously-stained mac, the off-colour jokes and the whisky-fumed breath that Brexit brings to the parties.

For the Tories, the embarrassment is the result of having been the architects of Brexit. For Labour, it is because, otherwise, they would be forced to explain why they don’t propose to seek to reverse it, even to the extent of seeking single market membership. The political reasons for that, both domestic and as regards the EU, are understandable and, in my view, justifiable. But, whether justifiable or not, they don’t change the basic fact that the country is accepting – or being forced to accept – that, year after year, it is going to get poorer and poorer than it would otherwise have been.

I’ve argued before that, even so, Labour’s post-Brexit policy is a real, if limited, alternative to that of the Tories. But no-one should think, and Labour shouldn’t pretend, that the accommodations that are possible within the Trade and Cooperation Agreement (TCA) framework will make much economic difference. Equally, as Michel Barnier has said in a recent interview (£), there’s no prospect of the EU re-visiting the basic architecture of the TCA. Yet, although Reeves made no mention of it, other Labour politicians, such as Shadow Business Secretary Jonathan Reynolds [approximately 10 minutes in], are including changes to the TCA as one of the ways a Labour government would boost growth.

And so Britain is set to limp on, if not the sick man of Europe then, at least, the only one who has shot himself in the foot. Sunak talks of making tough “long-term decisions for a brighter future”, and in his recent conference speech Keir Starmer said that under Labour “Britain will get its future back”, but the truth is that by far the biggest long-term decision of recent times was made in 2016. It wasn’t a ‘tough’ decision: it was made glibly, carelessly, almost casually. But its consequences are certainly tough, and not at all bright. What that bland and, to some, obscure little word ‘counterfactual’ in the economic estimates means is that each year those consequences will get tougher as Britain pays the growing price of a foregone future.

 

 

*The basic difference between the models, as I (a non-economist) understand it, is that the NIESR model compares UK actual and forecasted performance since Brexit with a UK counterfactual scenario in which Brexit had not happened, whereas Springford’s CER doppelgänger compares UK actual and forecasted performance since Brexit with the actual and forecasted performance of a weighted basket of economies which pre-Brexit were comparable to the UK and so is taken to be the counterfactual scenario for the UK had Brexit not happened. Springford has commented on Bluesky on how the NIESR model differs from his, and on some of the advantages and disadvantages of each. Springford’s model has been criticised by some pro-Brexit economists, and he has responded to, and rejected, their critique. Separately, Professor Jonathan Portes of King’s College London has argued that not only is their critique theoretically flawed but that their preferred model actually yields similar results to Springford’s doppelgänger.