A country on hold

Writing this weekly blog creates a certain rhythm, though the nature of it has changed over the years. In fact, in the early years it wasn’t always weekly, as I often wrote several short posts in some weeks. But it gradually settled into a weekly pattern of posting on a Friday morning, not necessarily rounding-up the week’s events but certainly based around them. As that happened, the length of posts also settled to being about 2000-3000 words each week. Occasionally they become even longer, but I try to keep to a 3000-word ceiling although it is often difficult to do so, and sometimes impossible.

For a long time, throughout most of 2017-2019, I more or less knew what the week ahead would bring in terms of particular scheduled parliamentary events, or negotiations with the EU. Of course the exact detail of what those events would bring could be highly unpredictable so that, often, the bulk of the post would be written in the small hours of Friday morning.

Since that period things have changed in that it is less common for there to be a predictable set of events, with the consequence that almost every Sunday and Monday I find myself thinking that there will be nothing to write about this week. Yet, invariably, and despite Brexit featuring less in the news than it did in previous years, there has always been plenty to say by Friday and the problem is just that of trying to find a coherent theme which isn’t simply a repeat of things I’ve already written, and which keeps close to my self-imposed word limit.

No news is bad news

All of this is a long-winded prelude to saying that this week, for the first time in over seven years, there is almost nothing new worth saying about Brexit. Of course there are, as always, a few news stories of note. In last Friday’s Financial Times (£) Valentina Romei, drawing on the latest ONS figures, reported that “UK goods trade has suffered its steepest five-year fall on record”, with Brexit at least one factor, and possibly a major factor. But it was hardly a huge surprise, any more than was the usual ‘yesbuttery’ from the usual suspects.

The most superficially plausible objection to Romei’s report is that the focus on UK goods trade ignores the far better post-Brexit performance in services trade, as discussed by Emily Fry, the Resolution Foundation's Senior Economist. However, as John Springford of the Centre for European Reform explains, “if the UK had remained an EU member, its services exports would probably have grown much faster”. Brexiters would no doubt huff and puff about the ‘probably’, but the basic fact remains that there’s no plausible reason to explain how three years of increased trade barriers with the UK’s biggest trade partner, and only very marginal, and very recent, reductions in (mainly goods) trade barriers with a couple of very small trading partners, could possibly mean anything other than less trade, including less services trade, being done than would otherwise have been the case.

To avoid this obvious fact, Brexiters go through all sorts of contortions, with Kemi Badenoch yesterday using the shop-soiled trick of claiming post-Brexit export growth by using figures without adjusting for inflation. It’s like someone who earns £30K a year saying that they are much better off than their granddad was because he only earned £25K when he was their age. It’s bad enough when it comes from some pseudonymous Twitter account, or some woeful Brexit-dogma website. But this was the Trade Secretary, giving a major speech the central point of which was the need for "realism, realism, realism" in discussions about trade! Inevitably it was picked up to be the front page of this morning’s Express, a screaming headline of Brexit’s success, based on a claim which bears as much relation to economic realism as potato printing does to fine art.

Relatedly, we have also learned this week that, on top of the recently announced ‘pause’ in the UK-Canada negotiations, an imminent UK-India Free Trade Agreement is looking increasingly unlikely. But that’s not surprising, either, and it makes little difference anyway. The entire idea that having a trade policy independent of the EU’s is of any value was always bogus. Even the now moribund idea of a UK-US trade deal, supposedly the great economic prize of Brexit, would make only a tiny dent in the costs of leaving the EU. In passing, it is almost forgotten now but, during the referendum, the then real possibility of an EU-US trade deal (TTIP) was regarded with horror by many Brexiters and touted by some as the main reason to leave (on the spurious grounds that it would have meant privatization of the NHS). It’s another small reminder of the contradictions, dishonesty and opportunism with which Brexit was sold.

Meanwhile, ‘Global Britain’ Brexit ideologue Daniel Hannan is reduced (£) to lauding Argentina’s Javier ‘El Loco’ Milei as an inspirational model for British economic policy. This, apparently, is what we could have had if only Liz Truss had been allowed free rein and, in fairness, that, at least, may be true. This one was especially striking because prior to the referendum one of the most perspicacious warnings about Brexit came from the Conservative commentator Garvan Walshe, in which he suggested that it would set Britain on a pathway of decline similar to that which Argentina took from its relative prosperity at the start of the twentieth century. In doing so, he noted that the country “suffers from a chronic political virus: with only brief interludes, it has since the 1930s been run by populists who maintain that the system is run for the elite, and against the people; that any experts are the system’s hired clerks, their wisdom corrupted by money; that the plain anger of the ordinary man isn’t just right, but righteous”. Now, Milei’s loony-tunes regime, which exemplifies such ‘anti-Establishment populism’, is proposed by Hannan as the template for post-Brexit Britain. At least it shows that one thing can be relied upon: if nothing else, there will always in any given week be one, and probably several, insane articles by Brexiters in the Telegraph.

Other than that, the sorry saga about import control introduction also continues to limp on, this week with the news that physical checks on goods moving from Ireland to Wales are unlikely to begin before spring of 2025. This is a delay within a delay in that, as is well-known, controls on imports from the EU have been delayed five times, and are only this year being implemented in full, with the physical checks aspect due to begin at the end of April. However, goods from Ireland (which mainly route through Welsh ports, especially Holyhead), were already exempted from that date, and checks were due to begin in October 2024. It is that latter date which now looks set to slip.

That these checks serve important purposes is something I’ve written about before, with one of them being to reduce the risk of contaminated foodstuffs entering the country. Without reprising the detail, this risk is increased by Brexit not because EU goods have ‘suddenly become dangerous’ (as Brexiters invariably sneer when these risks are mentioned) but because the UK no longer has full access to the EU databases that help to track criminal and accidental dangers, and relies on a rather patchy, understaffed and underfunded system of its own. The importance of this increased risk is shown by this week’s reports of soaring hospital admissions for food poisoning, some of which is attributable to Brexit.

Exactly how much is down to Brexit is difficult, probably impossible, to know. There are certainly cases, such as a major salmonella outbreak last year linked to Polish poultry, where EU imports are to blame. But of course it cannot be proved definitively that this would not have happened without Brexit, for the simple reason that the risks were not, and never could be, completely eliminated by EU membership and nor can they be by import checks. The point is that, in the absence of EU membership and of import controls, these risks are increased, in principle, and so it is hardly unreasonable to think that the observed increase of cases, in practice, is linked to this. It is just one of many ways in which, with almost no public recognition of the reason, Brexit makes our lives a little bit worse, contributing to an aggregate which degrades our overall quality of life, with everything becoming more grubby and more ramshackle as the damage accumulates.

Waiting for god knows what

So, yes, there is some Brexit news, as always. But the reality is that the entire British polity is now on hold, waiting for an election with an almost palpable impatience. Even Tory MPs, leaving aside the many, currently numbering sixty-two, who have announced they won’t be standing again, seem to be gagging for the orgy of blood-letting that will follow. We have a rotting, maggoty sack of a government which is clearly bereft of any kind of policy agenda whatsoever, and certainly of any Brexit agenda. It's true that many of its backbenchers still harbour fantasies of massive regulatory divergence, but the government knows that they are totally impractical and would be heavily resisted by business organizations.

In fact, this government has no purpose at all other than to cling on to the trappings of power, and persists simply in the hope that the opinion polls may improve if it does so for long enough, a hope which rests primarily not upon anything which it may do, but upon the Labour Party committing some kind of massive error. Conversely, this means that the Labour Party are now animated solely by the desire to ensure that they commit no such error before the election. As regards Brexit, that means saying as little as possible, and promising as little as possible.

Notably, in the main political and economic event of the week, the Budget, Brexit was not mentioned once in either Jeremy Hunt’s speech or Keir Starmer’s response (even though the OBR forecasts that accompanied it stuck to their estimate that the evidence continues to support their original calculation that GDP will be 4% lower in the long-term than it would otherwise have been). If this silence persists – and, frankly, there’s no doubt that it will – then the Tories will go into the election saying almost nothing about Brexit, their defining policy since 2016 and their flagship policy at the last election, for the simple reason there is nothing to boast about and the people who still support it mostly think that the government made a mess of it. And Labour will do the same due to the (not unreasonable) fear that to do otherwise might give the Tories a chance to re-group around a ‘save Brexit’ slogan, perhaps even to the extent of spiking the cannibalization of their vote by the Reform Party.

That we have arrived at this situation is actually quite remarkable, and the more so since, as I recorded at the time, the details of Brexit barely featured in either the 2017 election or the 2019 election. So this great ‘national liberation’, this economic and geo-political reset will, once again, and despite all we now know about its consequences, be left as something virtually undiscussed, in substantive terms, since the short and stupid referendum campaign of 2016.

Labour in power?

Assuming Labour win the election, whenever it comes, it’s at least possible that Brexit, or, rather, the UK’s relationship with the EU will become discussable again. That’s partly for the reasons of security and defence which I’ve discussed in recent posts, as these are the areas where the Labour leadership is already indicating it is keen to deepen the relationship. But the economic issues won’t go away. It’s difficult to exaggerate the scale of the mess Labour are going to inherit, not least because, to the extent that the current government has any policy at all, it is to deliberately ensure that the mess be as bad as possible.

The political comparisons with the 1997 election may have some validity, but the economic outlook will be totally different, and more like that (or those) of 1974, in the era of stagflation. The elections that year, it bears recalling, occurred when the Tories had just implemented a European policy about which the Labour Party was deeply split, and entertained reversing by holding the 1975 referendum. I’m not suggesting that is a direct parallel, but Labour will have to fix the economy they inherit, and especially its impact on public services, and do so very quickly if they are to avoid voter disillusionment. For such disillusionment is likely to set in rapidly given that the main thing propelling Starmer to power is disaffection with the Tories rather than enthusiasm for Labour.

That will make the ongoing negative impact of Brexit more difficult to avoid than it has been in Opposition. The 4% drag anchor on growth that the OBR estimate (and other credible estimates are even higher) is a big elephant to ignore, especially given Starmer’s pledge to make the UK the fastest-growing economy in the G7. Attention will quickly focus on what, realistically, might be achieved via the 2026 review of the Trade and Cooperation Agreement (TCA), with some recent signs that, from an EU perspective, there may be more scope than was once thought. That isn’t altogether unrelated to the security situation and certainly isn’t unrelated to whatever the outcome of the US Presidential election turns out to be.

But even the most maximal refinements possible within the TCA framework won’t do much for economic growth. This week the former MEP Andrew Duff has published a detailed, gradual plan for a bolder approach that Labour could take, and, for all the red lines that Starmer has drawn, it’s not hard to see this plan, or something like it, gaining a lot of support within his party, much of which is far less reconciled to Brexit than is its leadership. Even Duff’s first step, a UK-EU customs treaty, would have a strong economic rationale in terms of reducing some border frictions, and therefore compliance costs. Brexiters would screech about the loss of an ‘independent trade policy’ (even though the loss would be purely symbolic), but they will do that about anything Labour do, no matter how unambitious, that they could portray as a ‘betrayal of Brexit’ (as Suella Braverman already started to do during the Budget debate).

How loud would those screeches be, and how much political cut-through would they have? There are two, related, factors here. One is that it shouldn’t be under-estimated how much a change of government will change the dynamics of the right-wing media, which will become more compliant and much less influential overnight, as will the numerous thinktanks that have thrived on Tory patronage. That would be especially true if there was a huge wipe-out of the Tories. The scale of their defeat, and of a Labour victory, is the second factor. Whatever its size, the Tories look set to fall into vicious in-fighting which will consume most of their energy. And if it is as large as the largest current predictions, Labour’s freedom of action would be very considerable, at least initially. The question, however, remains the extent to which they would use it.

There is also, as ever, the question of whether the EU would enter into a significant change in the relationship. It can’t be assumed that even a total Tory meltdown would, in and of itself, make much difference to this. After all, the much-cited parallel of the 1993 Canadian election, which saw the near-extinction of the Progressive Conservative Party, ultimately led to a realignment of the right which brought the populist Stephen Harper to power in 2006.

The death row government

All of this is for the future. For now, Sunak will hold on, conceivably only until May but more likely until the autumn, especially as this week’s budget doesn’t seem to have ‘landed’ especially well. That means it is quite likely that we will have to endure another ‘fiscal event’, as well as whatever other nonsense they come up with, before the election. It’s a ludicrous and abhorrent situation, for all sorts of reasons, not limited to Brexit; the political equivalent of those ghastly death row stories where, long-ago convicted of some squalidly bestial crime, the inmate rots for years waiting to be strapped into the electric chair.

But, as the cliché has it, ‘we are where we are’. There will probably be many more weeks to come when there is little to say about politics, and even less about Brexit other than to record the endless drip of damage it is doing, and the endless drip of evidence that the promises made for it were false.