Friday 26 April 2024

(Still not) facing up to Brexit

During the more dramatic phases of the Brexit process, it was not unusual for some big development to occur just as I was finalizing my post for this blog. It happens less often now, but it did so last week, with two important announcements being made last Thursday, by which time I had largely written what became last Friday’s post, on Gibraltar and Brexit (since this was about a possible deal which hasn’t yet happened, it was a double fault on my part). The first announcement, which I only mentioned in passing in that post, was of further delay in the introduction of import controls on EU goods. The second, which I didn’t mention at all, was about the possibility of an EU-UK Youth Mobility Scheme.

Not taking back control

It’s actually not such a bad idea to have a gap between announcements and analysis, as ‘hot takes’ often miss important nuance. That applies to a degree to the Youth Mobility Scheme (YMS) issue, which I’ll come back to, but hardly at all to that of import controls. In the latter case, there is hardly a ‘hot take’ available, given that almost everything that could be said about it has been said on the five previous occasions controls have been postponed. Last time I discussed the issue, two weeks ago, when the common user charge was announced (about which, interesting new data and analysis of its likely costs was published this week by the UK Trade Policy Observatory), I said in a response to a comment on that post that the reason the checks were going ahead this time was that a further postponement “would be too ludicrous”. So that was yet another blunder on my part, and a particularly foolish one as I ought to know that nothing is too ludicrous when it comes to Brexit.

I don’t see much point in rehashing the reasons for this mess, which has its roots in the refusal by the government, and by Brexiters in general, to accept that such controls were the inevitable consequence of hard Brexit and, as such, have been in prospect since at least January 2017. Yet only in December 2020 did the government produce its policy paper on the ‘2025 UK Border Strategy’, having meanwhile refused to extend the transition period, thus creating a highly unrealistic timescale for a system that is heavily reliant on government IT procurement, as well as a new physical infrastructure (some of which has turned out to be unnecessary as government plans chopped and changed). There is, no doubt, a whole book to be written about the many mis-steps there have been along the way, and it is a reminder that the UK was not only totally unprepared for this very core aspect of Brexit, but is unable to afford it.  

The only nuance to be added about this latest delay is to note that the government has now created an almost dizzying array of partial introductions and phasing-in of measures. Part of that was in-built from the start. Whereas the EU introduced full controls the day after the transition period ended, the UK version was not just later but always included, for example, the phasing of dates by which, first, new paperwork requirements were introduced and, then, physical checks, as well as there being different dates according to the risk categorization of the product in question. But, on top of that, further layers of complexity have gradually been added. Examples include the announcements in March of a delay until 2025 on checks on goods coming from Ireland and, in January, that the risk categorizations of various fruits and vegetables had been changed so as to come within the ambit of checks, but, in these cases, not until October.

This has made it easier for the government to pass off this latest delay as if it were no more than a further ‘technical’ change to risk categorizations, so that only the highest risk goods will have physical checks “turned on” at the end of this month (though the common user charge will begin, regardless of that). As a result, this delay has passed off more quietly than the previous ones, for few people, unless directly affected, can begin to understand, still less to be much agitated by, changes to what has become so byzantine a story. However, those who are affected most certainly are agitated by a system which, in the words of the Chair of the Small Business Federation (£), “is in complete disarray”.

Labouring the point

From a policy, or public administration, perspective, what has happened is a farce, and one which, politically, could have a major impact if, as it risks, there were to be a major outbreak of animal or even human health disease as the result of contaminated products being imported. However, for the moment, the main political talking point is whether this latest delay amounts to a political trap for an incoming Labour government, forcing it to be the one to introduce controls which are likely to create long queues and supply disruptions, as well as price increases and reduced consumer choice.

My own view is that it is more likely that, fearing such effects, the Conservatives’ intention is more about avoiding that happening before the election than laying a trap for Labour afterwards. That is because one of the few Brexit-related commitments Labour seem clear about is to seek a Sanitary and Phyto-Sanitary (SPS) agreement with the EU which, if made, would obviate the need for most of these controls. That would, however, entail Labour accepting ‘dynamic alignment’ (about which they have been coy) and, even though it is likely the EU will be agreeable, it will take time to negotiate. So it can’t be ruled out that Labour would need to introduce some additional, interim checks beyond whatever is in place by the time of the election.

It is a mark of this strange political period we are living through that there is much attention to what an incoming Labour government would do. It’s not just that, as I wrote recently, we are a country on hold. It’s that this has been going on for so long, and the opinion polls suggesting a huge Labour victory have proved so durable, that political commentators have virtually lost interest in speculating about the next election and are already talking more about the government that will follow or, even, the election which will follow that. In some cases, that next Labour government is already being written off as a failure, doomed to win only a “hollow victory”, to become immediately unpopular with the public, and to be internally “ungovernable” into the bargain. All these things may prove true, but such predictions seem rather premature when we are probably six months from an election that has still to be fought, let alone won.

No mobility please, we’re British

Nevertheless, speculation about what a future Labour government would do is perhaps the key aspect of the other of last Thursday’s news stories. This was what was unhelpfully and misleadingly reported as an offer from the EU to the UK of “free movement for young people” (meaning 18-30 year-olds). It was misleading, firstly, because it was not an ‘offer’ to the UK. It was a proposal and recommendation from the European Commission to the Council which, if accepted, would empower the Commission to launch negotiations with the UK. Secondly, as the detailed text makes clear, the proposal is not for ‘free movement’, even for this age group, but would have severe constraints including on length of time (probably four years) and location (movement would be confined to one EU country, rather than to the EU bloc), and several other restrictions.

The idea behind the proposal is not novel, in the sense that something like it was envisaged in the non-binding Political Declaration that accompanied the Withdrawal Agreement. That never got developed in the Trade and Cooperation Agreement talks because Johnson and Frost declined to do so, in line with their minimalist approach to the negotiations. That the EU should be making such a proposal at this particular moment is a matter of some speculation, but the Commission’s text includes under the heading ‘reasons for and objectives of the recommendation’ the words: “In the course of 2023, the United Kingdom approached several (but not all) Member States with the intention of negotiating arrangements on youth mobility, modelled upon the United Kingdom’s youth mobility visa scheme. This approach would result in differential treatment of Union nationals.”

Thus many well-informed commentators, including Anand Menon, have suggested, and I agree, that this suggests that a key motivation for the timing of the proposal was to fend off UK attempts to make bi-lateral agreements with EU member states, and, conversely, to preserve a union-wide approach to managing UK-EU post-Brexit relationships. This relates to a point I made in last week’s post, about how the UK has never really learned the lesson contained in the very first draft of the EU’s approach to the Brexit negotiations, namely that the bloc would act as a bloc. That failure doesn’t just show a continuing naivety about the EU. In the case of seeking bilateral youth mobility agreements, it also shows a maladroitness of diplomacy since those EU countries excluded from such approaches, and likely to resent that exclusion, are also likely to include some with which the UK is keen to have good relations for other purposes, such as defence or the control of irregular migration.

However that may be, the government immediately rejected the EU’s ‘proposal’ whilst repeating its preference for “country-by-country deals” with some EU members thereby displaying, at the least, a diplomatic tin ear and, at most, and in fact, its failure to learn that wider lesson. With equal alacrity, Labour stated that “it has ‘no plans for a youth mobility scheme’ if it wins the general election later this year” and that “it had already pledged ‘no return to the single market, customs union or free movement’ if it takes office.”

There was little to be surprised about in either reaction. The stranglehold the Brexiters have on the Tory Party needs no rehearsing, and the tedious assertion (£) of one commentator that this development meant that “the EU has finally admitted it needs Britain more than we need it” suggests that some parts of Brexitland still have the 2016 calendar on the wall. As for the Labour Party, as I noted recently, infuriating as many ‘remainers’ find it, there is simply no prospect of it making any fresh commitments about the EU before the election. However, the formulation of Labour having ‘no plans’ for a YMS is one which leaves a tiny amount of wriggle-room, whilst the reference to the freedom of movement ‘red line’ is, strictly speaking, irrelevant given that YMS is not freedom of movement. So it remains possible that they will become bolder on YMS and other EU matters after the election.

What is a certainty is that they won’t do so any earlier. Labour resemble a team in a three-legged egg and spoon race, with the egg being made by Faberge. They aren’t going to risk the tiniest spill by giving the Tories and the Brexit press an angle to attack them. That carries its own risks, even pre-election, as it might boost support for the LibDems, who favour a YMS. It also carries risks for post-election room for manoeuvre. But, like it or not, and agree with it or not, it is obvious that Labour have decided to take those risks.

Them and us

The political dynamics of the YMS proposal for Labour have led to much comment that the Commission’s timing was unhelpful to Starmer. Such comment is misguided, not just because, as discussed above, the timing had a different motivation, but because it is based on a fundamental misunderstanding about Brexit. However, I don’t think that misunderstanding is quite as presented by Menon, when he says that “some in the UK need to rid themselves of the idea that the EU are falling over themselves to get down to business with a new Government”.

I take that point to an extent – the EU’s approach to the UK will be driven by its own interests, not vague sentiment – but I also take the points made in response to it by Mujtaba Rahman of the Eurasia Group, another highly respected expert on UK-EU relations. Rahman thinks, rather as I do, that the geo-political context is now so different to that which obtained during the Brexit negotiations that quite significant developments in those relations are in both the EU’s and the UK’s interests, and are not just limited to security in its narrow sense.

Nevertheless, what continues to have definitively changed as a result of Brexit is that the EU no longer has any interest in tip-toeing around political sensibilities in the UK. There was a great deal of that when Britain was an EU member, just as there is for any member. Brexiters represent it as a weakness of the EU that it needs to accommodate the often-diverging priorities of its members (for example in trade negotiations), whilst simultaneously lambasting the EU for over-riding those priorities. But the reality is that the EU is a constant negotiation between these two poles.

In the UK’s case, its multiple opt-outs from core EU projects showed Brussels’ recognition of the constraints of British politics. That recognition continued even during the Brexit negotiations, but effectively ended once the Theresa May Withdrawal Agreement was finalised*, and the change was crystallised in one specific moment, in February 2019, when Donald Tusk made his ‘special circle of hell’ comment about those who had led the campaign for Brexit despite having no idea about how to deliver it. He did so knowing, but no longer caring, that, as Leo Varadkar warned, the British press would ‘have a field day’ with his remarks.

At all events, the point now is that, although Brexiters and the pro-Brexit media remain obsessed with the EU, the EU is no longer interested in them, and still less in placating them. That is not just a matter of indifference. Crucially, it is because, to the extent that there is indeed an EU interest in agreeing closer relations with the UK, that interest is only served by durable agreements with the UK state, rather than any that might be ‘slipped through’ by any particular UK government. In other words, if agreements were only possible through carefully-timed diplomacy that is sensitive to the domestic political constraints of such a government, then they would be inherently fragile.

 So it isn’t just that the EU isn’t interested in placating UK domestic political divisions, it’s that its interests aren’t served by agreements which rest on it placating such divisions. That applies to the YMS, but, writ large, it applies to any and every agreement that might be reached, up to and including the UK re-joining the EU. The consequence is that any progress that a future Labour government might make in repairing the damage of Brexit will require it to build a sustainable domestic political consensus for that repair quite as much as it will require negotiation with the EU.

Us and them

It is clear we are a long way from such a consensus. Indeed, the two stories discussed in this post are amongst many examples of the way that Britain is incapable of facing up to Brexit. In the case of import controls, we literally shy away from the damage of enacting Brexit. In the case of YMS, we can’t give careful consideration to, let alone accept, even a quite modest reversal of the damage which enacting Brexit has done.

I’m sometimes told that it is only ‘people like you’ who are still going on about Brexit, and that no one except a few ‘remainiacs’ cares about it anymore. If that were true, the path ahead would be easy and quick, leading at the very least to a very much closer relationship with the EU. But the reality is that there are plenty of voters, and a very large segment of the political class and commentariat, who continue to care very deeply about Brexit and who have scarcely moved on from positions they held years ago. David Frost, writing with Robert Jenrick in the Telegraph this week (£), is a prime example, still chuntering on about the need to “defend” Brexit rather than treat it as “an embarrassing secret”, still holding out the myth of wonderful Brexit benefits that can be unleashed, and still – incredibly – trotting out the line that the Northern Ireland Protocol was only “temporary” and that the Windsor Framework should either be re-negotiated or unilaterally dropped. Meanwhile, for all that ‘remainiacs’ bemoan Starmer’s rather constipated timidity, Frost insists that even that would be enough for Labour to “undo” Brexit.

It would be nice, and in a better polity it would be accurate, to regard Frost as no more than a fringe figure, promoted well beyond his competence, and seeking to defend his own indefensible legacy. But he speaks for the now rampant Brexitism of the Tory Party, as shamefully displayed with the passing of the Rwanda Bill this week. The Rwanda policy comes from the same ideological maw as Brexit, exhibits the same preference for belief over reality (‘Rwanda is a safe country’) and the same fantasy that ‘sovereignty’ can make it so, shows the same indifference to international reputation, and will share the same fate of simply not being able to do what it promises it will do. The only sense in which it is not the embodiment of Brexitism is that the hardline Brexitists think it doesn’t go far enough.

It is this implacable Brexitism which, without representing the majority of the population, is powerful enough to hold the rest of the country to ransom. It is a large part of what prevents us from undertaking the kind of honest national self-assessment provided by an excellent new book by Financial Times’ journalist Michael Peel, What Everyone Knows about Britain (except the British). Of course, such an assessment, when undertaken collectively, is never going to yield unanimity – in a pluralist society, that’s impossible by definition – but we do need a broadly shared understanding of some key policy issues, most notably immigration, and of Britain’s place in the world. If there is such a thing as national political psychology, then we are in dire need of an intense course of psychotherapy.

Some may bridle at my use of ‘we’ and ‘us’ in all this. The fault, after all, lies with the Brexiters and Brexitists – with ‘them’, not ‘us’. It’s certainly highly tempting to think so, and I doubt I’m the only person to still have a “don’t blame me, I voted remain” mug lurking in the cupboard. But, as time goes by, I’m increasingly convinced that this is part of the problem that Brexit has bestowed, rather than part of any process of solution, and that conviction has been increased by reading Peel’s book. There’s a sense in which we have, collectively – through the kinds of political institutions and political discourse we have allowed to develop or persist – arrived at this point, whatever individual lack of culpability any one of us may, with some justice, feel we have.

I’m not sure where that thought leads (perhaps I’ll return to it in a future post). I don’t mean to absolve Brexiters for what they have done, and are still doing. But I suppose it implies the need for a greater recognition from those of us who oppose Brexit that what lies ahead is going to be a slow and arduous process of consensus-building as regards repairing the EU relationship, as well as of wider political reform. If Brexit teaches us anything, it is to be sceptical of quick, easy, and simple solutions to complex problems, and Brexit has bequeathed us a complex problem.

That said, the costs, both economic and non-economic, of Brexit are so high that we don’t have much time to play with. If consensus-building is the pre-condition of a solution, it won’t happen on its own but will require political leadership. Realistically, that can currently only come from a Labour government facing up to Brexit. So, whilst Labour’s extreme pre-election caution is clearly not going to change, the moment the election is won they must not delay in starting to provide such leadership. How likely is that? I don’t know, but it’s the best hope that we have.



*It could be argued that it re-appeared at the moment that Varadkar and Johnson had their ‘walk in the park’ that led to the revised Northern Ireland Protocol. However, I think that was much more about Varadkar’s and Ireland’s interest in the island of Ireland than it was about trying to accommodate English Brexiters.

Friday 19 April 2024

Gibraltar, and reviewing the Brexit 'bill of goods'

Last Friday saw a potentially significant piece of Brexit news with the joint statement of the first meeting in its current format of political leaders from the UK, EU, Spain and Gibraltar, which reported that “significant progress” had been made towards achieving an agreement about the post-Brexit arrangements for Gibraltar. This was followed by widespread media reports that such an agreement was very close, and “within kissing distance” in the words of Gibraltar’s Chief Minister, Fabian Picardo.

An agreement about Gibraltar was described in the Financial Times (£) as “the last big unresolved problem of Brexit”. That is slightly misleading in the sense that Brexit is, and will remain, an ongoing process, giving rise to ongoing problems, and even to ongoing negotiations, if only because of the joint governance structures that exist in relation to various part of the Withdrawal Agreement and Trade and Cooperation Agreement. But it is true in the narrow, yet important, sense that it marks the end of the negotiations which began in 2017 between the UK and the EU about the institutional form of Brexit.

As such it is a good time to take stock of the Gibraltar strand of Brexit and how that intertwines with the Brexit saga and, ultimately, to the extent that it does represent a certain kind of completion, a good time to take stock of Brexit itself.

Gibraltar and Brexit

Gibraltar’s situation is complex. As a British Overseas Territory it is not part of the United Kingdom but is a part of the UK’s sovereign territory, a sovereignty long-disputed by Spain since having conceded it in the Treaty of Utrecht of 1713. In recent years Spain has sought various models of joint sovereignty over what the UN currently characterizes as a non-self-governing territory. However, Gibraltar has twice, in 1967 and 2002, held referendums showing massive 99% majorities for remaining as UK sovereign territory. Yet in the Brexit referendum, opinion was completely different to that of the UK itself, with 96% support for remaining within the EU. This situation, along with the military significance of ‘the Rock’, its border and economic entanglement with Spain, and its role as a tax haven, means that Brexit posed a particular conundrum.

Even before the referendum, the status of Gibraltar was a fraught issue in UK-Spanish relations, so it is actually quite surprising that negotiations over its post-Brexit situation have dragged on rather quietly for so long, especially given that it gave rise to the first flashpoint in the Article 50 process. 

To briefly summarise that row, immediately after the UK gave notice under Article 50 at the end of March 2017, the EU Council produced its draft negotiation guidelines, which included a paragraph to the effect that no agreement on the EU’s future relationship with the UK would apply to Gibraltar without the agreement of Spain. Quite what that meant at that time was slightly obscure, since there were different understandings in play as to whether the future relationship would require unanimous agreement of all EU members (which would include Spain anyway), and for that matter different understandings of how the future relationship would be negotiated (at that stage, the UK was still pushing for it to be done in parallel with the Article 50 talks).

However, one thing it very clearly meant, even if only symbolically, was that the EU regarded Spain as having some kind of special status as regards Gibraltar and, whilst that might be taken to be no more than a recognition that it was the only country apart from Ireland where there was a land border with the UK territory, it also seemed to recognize, if not to uphold, Spain’s claim to sovereignty over Gibraltar. Certainly that was how it was taken by Brexiters, and it unleashed a torrent of jingoistic nonsense, to the extent that some even speculated about going to war with Spain over the issue.

This episode happened almost exactly seven years ago, and many may have forgotten it, but it is worth recalling now, not just because a Gibraltar deal is finally in the offing, but because even at the time it foreshadowed some more general lessons, which I identified in my post of 2 April 2017, the consequences of which are still playing out.

The lessons of Gibraltar

Lesson #1: The negotiating process

One lesson was, indeed, about the issue of the sequencing of exit and future terms negotiations, and the fact that the EU was clearly not going to accept the UK’s suggestion, in Theresa May’s Article 50 letter, that these be conducted in parallel. The roots of this actually went back much further. Before the referendum, the Vote Leave campaign had promised: “Taking back control is a careful change, not a sudden stop - we will negotiate the terms of a new deal before we start any legal process to leave.” This was always nonsense in terms of the Article 50 process – the only legal leaving process that existed – and an hour before the referendum result was officially confirmed the European Council had already circulated an advisory note to EU members reiterating this.*

In one way, that lesson was fairly quickly learned. Having threatened that it would be the ‘row of the summer’ of 2017, when the time came, shortly after May’s disastrous 2017 election, Brexit Secretary David Davis immediately capitulated to ‘sequencing’.  Yet in other ways the lesson went unheeded in that, throughout the negotiations, UK politicians and the media frequently confused or conflated exit and future terms, and Boris Johnson deliberately did so in the 2019 election, when he proposed his ‘oven-ready deal’ as something which would ‘get Brexit done’ when it was, in fact, only the exit deal.

Ever since then, many of the Brexit Ultra MPs have persisted in the belief that the Northern Ireland Protocol part of that deal was somehow temporary, contingent on the terms of the future trade deal (on the most charitable interpretation, this rests on a confusion between Johnson’s ‘front stop’ Protocol and May’s ‘backstop’, but even that degree of charity entails that those MPs were lamentably incompetent). More generally, even now, Brexiters represent the acceptance of sequencing as the first failure of May to ‘play hardball’ with the EU, and hence it is a foundational component of their explanation of why Brexit hasn’t been done ‘properly’.

It’s a myth which will not die, and was trotted out yet again this week by Liz Truss (as she seeks to drum up sales for a political memoir variously described by reviewers as “self-serving” and “ludicrous”, “shamelessly unrepentant, petulant … and cliché-ridden”, and “weird”). I suspect it will be years, if not decades, before this myth finally disappears from British politics.

Lesson #2: The meaning of a union

The second lesson of the April 2017 Gibraltar row was that whilst the EU would negotiate as a bloc, and in the interests of the bloc, it would do so with particular regard for the interests of those members most directly affected by Brexit, such as Spain, Cyprus (in relation to UK military bases) and, perhaps most of all, Ireland. This again exposed the hollowness, if not downright ignorance, of the Brexiters’ pre-referendum position, most notoriously articulated by David Davis when he asserted in May 2016 that “the first calling point of the UK’s negotiator in the time immediately after Brexit will not be Brussels, it will be Berlin, to strike the deal: absolute access for German cars and industrial goods, in exchange for a sensible deal on everything else. Similar deals would be reached with other key EU nations.”

It was an especially idiotic idea given that one of the Brexiters’ own objections to the EU was that it did not allow its members to make their own trade deals, and such nonsense was quickly exposed as such. However, it never quite died and, throughout the negotiations, the UK frequently used – whatever the Ultras may say – “hard tactics” to try to pressurise individual states or even regions into breaking the EU’s unity, as recorded by a key member of the EU’s negotiating team, Stefaan de Rynck, in his book Inside the Deal (p.61).

That these failed reflects, as the early Gibraltar row portended, the care which the EU took, and will continue to take, over protecting the specific interests of its member states, including small ones like Ireland (compare this with Davis’s airy reference to “key” EU nations). As such, it also served as a reminder of the ways that sovereign power is magnified, rather than extinguished, by EU membership. The contrast with the carelessness, bordering on disdain, with which the London government treated the interests of Scotland, Wales, Northern Ireland and, in a sense, Gibraltar itself, was a marked one. There is still no sign that Brexiters or the British government have learnt any aspect of this second lesson.

Lesson #3: The complexity of Brexit

The third of the lessons identified in my post about the 2017 Gibraltar episode was that, even leaving aside the nature of the exit process, it was an early example of the huge number of complex problems which Brexiters had poured scorn on during the referendum, but which the UK was now going to have to face up to. For although it was certainly not a major campaign issue, the possible implications of Brexit for Gibraltar had been pointed out.

In particular, in May 2016 the then Foreign Secretary Philip Hammond had said: “I genuinely believe that the threat of leaving the European Union is as big a threat to Gibraltar's future security and Gibraltar's future sovereignty as the more traditional threats that we routinely talk about.” The reaction from Brexiters was furious, with Liam Fox enraged that the possibility should even have been mentioned, saying “I think there are limits to what you can and cannot say in any campaign that goes way beyond acceptable limits” (sic). All this had been reported in the Daily Express under an inevitable headline about ‘Project Fear’ yet, just a few months on, and there was actually talk, admittedly ludicrous, of going to war to defend sovereignty over Gibraltar.

As the months and years have gone by, just about everything which the Brexiters said would be simple, quick, and easy has been shown to be complex, slow, and difficult. It’s true that there have been exceptions. Rolling over EU trade deals proved less difficult than many, including me, thought, and so has the creation of a Nuclear Cooperation Agreement with the EU, following exit from Euratom. That’s not to say that either of these things has been beneficial, but they haven’t presented the intractable problems associated with, say, the search for ‘frictionless trade’, or a solution to the Northern Ireland Trilemma.

However, the general picture is that almost everything, from fishing quotas to residency rights, has thrown up massively more complexity than the Brexiters had admitted, or even understood, before the referendum. And this remains the case. Just this week, Trade Secretary Kemi Badenoch spoke of the increased trade barriers with the EU as being something done by the EU to the UK rather than something chosen by the UK. Then came yesterday's truly ludicrous news of yet another delay in the introduction of import controls on goods coming from the EU (more on this in future posts, no doubt).

Gibraltar in limbo

As regards Gibraltar itself, after the initial flare-up in 2017 its post-Brexit future became detached from the main Brexit negotiations and effectively ‘parked’, following an agreement in November of 2018 as part of the attempt to get May’s ill-fated Withdrawal Agreement off the ground, and it was not covered by the eventual trade agreement, simply leaving the single market at the end of the transition period (it had never been part of the customs union).

Since then, the territory has been “in limbo”, operating under the terms of a series of Memoranda of Understanding created in 2018, and then a temporary agreement made in December 2020 which also set the path for negotiations for a UK-EU treaty. This has enabled Gibraltar to be a party to the Schengen agreement, allowing an open land border with Spain, and for Spain to be involved in policing its port and airport – these, along with regulatory alignment, being amongst the most disputed issues in the negotiations.

However, this does not mean that these temporary arrangements have run smoothly. For example, in April 2022 several British citizens were refused entry into Spain from Gibraltar because they did not have documentation showing onward travel or evidence of being able to financially support themselves in Spain. Brexiters expressed outrage, apparently unable to understand that they are not alone in wanting to secure borders from potentially illegal immigration.

Meanwhile, after some fractious pre-negotiation, negotiations for a formal treaty began in October 2021, since when there have been seventeen rounds of talks. As discussed in relation to other policy areas in one of my recent posts, the churn of Prime Ministers and Foreign Secretaries since then may have been one barrier to progress. It is of note that the conduct of the negotiations gave rise to one of the allegations of bullying against one of these Foreign Secretaries, Dominic Raab, which led to his subsequent resignation as Deputy Prime Minister. That allegation arose because a senior civil servant had supposedly jeopardised UK sovereignty over Gibraltar, emphasising how this concept has continued to lie at the heart of the negotiations.  

There were rumours of a deal in December 2022 and again in November 2023, so it is possible that nothing will come of the latest announcement. However, there is now a clearer sense that there has been political agreement, perhaps a result of David Cameron becoming Foreign Secretary, and that the outstanding issues are of a technical nature. It seems likely that any agreement that is reached will entail Schengen area passport checks being undertaken at Gibraltar’s port and airport by EU Frontex staff (rather than Spanish border staff), accompanied by an agreement to keep the Spanish-Gibraltar land border open without checks, and some form of joint UK-Spanish management of the airport (which has a particular sensitivity as it is also an RAF base), as well as full regulatory alignment.

These possibilities have already attracted the ire of Brexiters such as Bill Cash and Andrew Rosindell, and dark mutterings of “the EU taking Gibraltar by stealth” in the Telegraph, but how much actual opposition they would put up to an agreement is unclear. Very likely, as with the Windsor Framework, the power, and perhaps even the interest, of the ERG will be shown to be much reduced.

Crucially, as with the Northern Ireland situation, and in a different way with the import controls situation, the Brexiters have no answer to the fundamental conundrum, which is of their own making: they have created the need for a border but don't want to create a border. More generally, their naïve idea of untrammeled sovereignty has again been exposed to the realities of power and found wanting. But if they are not able to prevent a deal, nor are they able to understand why a deal has been done. The warships will not sail, and Gibraltar will become yet another grievance of Brexit betrayal.

The Brexit bill of goods

As Brexit issues go, Gibraltar has received less attention in the UK, at least, than it should have done (I include myself in that criticism) although, of course, there are good reasons why Northern Ireland, to take the most obvious, somewhat comparable, issue, has received so much more. Yet it is a revealing one, not least as a reminder of the quite casual, careless way in which the Brexiters tossed the lives of so many people into disarray, uncertainty, or even crisis.

It is also an example of the way that the entirety of the Brexit process is a still unfolding lesson in the realities of what Brexit means, as compared with what Brexiters claimed it would mean, a lesson which is only very slowly and painfully being learned as Brexit continues its relentless degradation of national life. Just in the last week there have been more instalments, from news of medicine shortages to news of restaurant staff shortages to news of garden centres having to stockpile goods, whilst the latest import controls delay continues to expose us to increased risks of disease and sub-standard products. But although the lesson is by no means over yet, there comes a moment at which it is reasonable to set a test, and that surely cannot wait for the 25, 50 or even 100 years that, since though not before the referendum, some Brexiters have suggested need to pass to assess their project. Nor can the test of success be, as most Brexiters these days seem to imagine, whether it has been less damaging than the worst predictions made for it. Brexit was, after all, sold as a positive project.

In an interview the other day, the actor Michael Douglas remarked, apparently in passing, that Britain was “sold a bill of goods” (meaning something passed off in a deception or fraud) and that “they should take the old political speeches that were made [before the referendum] … they should remind people of what they were promised”. It’s such an obvious point, and yet one rarely made in British political discourse. People should indeed be reminded of what David Davis promised in the article I referred to earlier. Or of what Daniel Hannan promised. Or of what Vote Leave’s slick, shamelessly manipulative video promised Brexit would mean for the NHS.

This isn’t about picking around in the entrails of long-past events. It is about promises made to the British people less than a decade ago, and made by people many of whom are still active in political life. Moreover, many of those people are now, like Hannan, using the same tricks to urge us towards an equally ruinous Brexit 2.0 of ECHR derogation to, as he put it this week (£), “finish the work of Brexit”, whilst others are now seeking a referendum on immigration.

We live in a time when almost every controversial decision or event is made subject to an independent inquiry. None of them relates to anything of the magnitude of Brexit, which surely warrants such an inquiry. If a Gibraltar deal is about to be done, and the long years of literal Brexit negotiation are finally ended, that would be the ideal time. It won’t happen, of course, but here’s a thought: if, as David Lammy said this week, the coming Labour government will be committed to ‘progressive realism’ in foreign policy, including relations with the EU, then what better place to start than a realistic assessment of whether Brexit has lived up to the promises made for it?



*There are two different issues nested within this. One is about the EU successfully insisting that there could be ‘no negotiation without notification’ (i.e. without triggering Article 50). The other is about whether any discussion of future trade terms could be undertaken prior to the completion of the terms of the Withdrawal Agreement. On the latter, whilst refusing the UK’s attempt to undertake the two sets of talks in parallel, the EU somewhat softened its position to the extent of agreeing that the talks within the Article 50 period could encompass two sequenced phases, the first broadly agreeing exit terms and, subject to ‘satisfactory progress’ on these, a second that would finalise the exit terms whilst also discussing preliminary future terms. Phase one was ostensibly completed with the agreement of December 2017 but, for reasons far too long to be summarised here, phase 2 discussions about future terms never really happened (for details, see just about every post on this blog for the two years after that date, or chapters 2-5 of my book Brexit Unfolded).

Friday 12 April 2024

Britain's Brexit drift

It’s fair to say that Brexit has ceased to provide much in the way of drama. To use a cricketing analogy (and they are always the best ones), it is as if Brexit’s Bazball days have given way to the cricket of an earlier era, so that what we are now seeing is akin to Geoff Boycott (who, it’s relevant to say in this context, is both a keen Brexiter and Theresa May’s childhood hero) grinding out a painfully slow innings on a dead wicket. Such play as there is gets constantly interrupted by rain. The crowd got bored long ago, and are huddled down under macs and umbrellas. The captain, though as keen an enthusiast for cricket as for Brexit, has no strategy, no leadership skills, is despised by half the team, and will surely be replaced when the inevitable defeat arrives. Meanwhile, dreary, be-blazered bores chunter on about Lord’s being the home of a game that long since found its centre on the other side of the world.

And so we drift on.

Import controls and the common user charge

Probably the biggest piece of Brexit-related news over the Easter holiday was the government’s announcement of the ‘common user charge’ to be levied on imports of animal and plant products from the EU. This is the latest aspect of the much-delayed introduction of post-Brexit import controls, the next phase of which become operational at the end of this month. These in turn are part of the economic border with the EU which Brexiters swore would not be necessary because there would be some miraculous deal which ensured ‘frictionless trade’ without participating in the institutions which ensure frictionless trade.

The common use charge will add £29 to a consignment of an individual product line, so where a consignment contains more than one product line the charge will be multiplied by that number, up to a cap of five, making the maximum charge £145. This maximum is likely to be reached on many consignments because the kinds of products involved, many of which have short lives, are typically shipped in small quantities within a bulk assignment. However, it shouldn’t be thought that these are the only costs Brexit has added to importing from the EU. In some cases there may be health certificates to be paid for, in others duty or VAT to be paid. In all cases there will be the administrative costs of ensuring compliance.

The impact of all these costs will be very similar to what happened when the EU introduced controls in the other direction (i.e. British exports to the EU), on time, when the transition period ended. That is, small firms (£), trading smaller volumes of goods, with tighter margins, and perhaps no experience of international trade other than with the EU, will struggle the most and many will cease to trade at all. A study by Allianz Trade released this week suggests that the first year of these latest changes will add 10% to the costs of importing the products affected. Larger firms will be more able to ‘absorb’ these costs, but doing so doesn’t make them disappear, it just means they manifest themselves in other ways, including higher prices. It is one of the many ironies of Brexit that, before the referendum, we were told that it was decadent, globalist ‘big Business’ that opposed leaving the EU but that plucky British entrepreneurs couldn’t wait to be rid of ‘Brussels’ red tape’.

The common user charge only applies to goods coming through the Port of Dover or the Eurotunnel at Folkestone, and will be used, according to the government’s obtuse rhetoric, “to recover the costs of operating our world-class border facilities where essential biosecurity checks will protect our food supply, farmers and environment against costly disease outbreaks entering the UK through the short straits.” At least this statement clarifies one thing, which is that these checks do actually serve a purpose. It’s a point I’ve made repeatedly on this blog, but one which Brexiters like Jacob Rees-Mogg never understood, and fails to understand even now.

Food security and farming

At the same time, by confirming the purpose of checks, the government has tacitly admitted that its failure over the last three-plus years to operate full import controls has put the public at risk, which ought to be a scandal. And that scandal will not be ended once the controls are in place. The decision to use Sevington, 22 miles from Dover, as the main site for sanitary and phyto-sanitary (SPS) checks, means that, far from being ‘world-class’, the border will have a “gaping hole”, according to the head of the Port of Dover Health Authority, risking “illegal, unfit, dangerous, and diseased” products entering the country. Meanwhile, the Chief Executive of the Cold Chain Federation has said that it is becoming evident that the new Border Target Operating Model (to give the new “world-class border” its official name) is “broken” before it has even been fully implemented.

The lack, or inadequacy, of import controls is one of several Brexit-related complaints from British farmers which have led to recent protests, including a tractor go-slow outside parliament. Other complaints include the impact of the one-sided trade deals the UK made with Australia and New Zealand, and the ongoing failure to create a viable replacement for the Common Agricultural Policy (CAP). As with other instances of Brexit damage, Brexiters are keen to point to what is happening in other countries, in this case meaning farmers’ protests in the EU and elsewhere. And, as usual, this misses the point which is that whilst all sorts of countries, including this one, have such problems, it is only this country which has added Brexit to them.

In fact, agriculture, and the replacement for CAP in particular, serves as a case study not just of the damage of Brexit but of how Brexit has overloaded what in my last post I called Britain’s ailing state. Despite CAP having been a cause celebre for Brexiters for decades, policy since leaving the EU has been characterised by endless changes of direction and no coherent or consistent strategy, in part because of ministerial churn. The consequence, as Jill Rutter of the UK in a Changing Europe puts it in her review of this saga, is that “the people whose livelihoods depend on Defra decision-making are crying out for some stability in its ministerial team to allow them to plan long-term.”

The "death" of the London stock market  

There was a time when farmers, like fishermen, another of the Brexiters’ supposed causes, believed that they would be ‘sold out’ by the government in its trade negotiations with the EU in order to protect access for financial services. In fact, although both groups do indeed feel they were sold out by Brexit, the Trade and Cooperation Agreement (TCA) had little coverage of financial services. Instead, there have been several one-sided equivalence agreements, where the UK has granted EU firms access to UK markets, and one major EU-granted equivalence agreement for UK-based derivatives clearing houses. A Memorandum of Understanding regarding financial services regulatory cooperation was signed last year, reflecting the thaw in UK-EU relations following agreement of the Windsor Framework, but there is little chance of it yielding any substantive changes, at least until after the next election.

In any case, Britain’s post-Brexit financial services policy is hardly any more clearly defined than its agricultural policy and, in both cases, the political instability and incompetence unleashed by Brexit have taken their toll. A particular casualty has been the decline of the London stock market. As always, there are many factors in play, but even the Telegraph has identified (£) Brexit as the “prime suspect in the death of the stock market” and the referendum as a decisive moment in the City’s “brutal losing streak”. That losing streak saw a record fall last year in the number of companies listed on the London market, and it has been reported this week that Shell may move its listing to New York. If it does so, it will be following several others, although it would be the most high-profile and damaging case.

In his latest Substack newsletter, the respected economics commentator Simon Nixon pulls no punches in describing what is happening to the London stock market as “one of the biggest issues facing Britain today”, and a “national disaster that is unfolding”, having ripple effects into numerous professions and, hence, into the businesses that service them. And whilst many may care little for the fate of City fat cats, the impact on tax revenues and public services affects all of us. Nixon is equally clear about why it is happening. Rather as with the failures Rutter identifies around CAP, Nixon says that “this is above all a verdict on the political chaos and uncertainty that has arisen in Britain since Brexit.”

It is an important diagnosis because it points to the complexity of what is going on (and which is also important for other sectors). One aspect is purely economic. Brexiters, Nixon says “failed to recognise the extent to which [the stock market’s] pre-eminence had ceased to hinge on British exceptionalism but on the anchoring of the British economy in a deep single market of 450 million people.” The other is the elusive but undeniable factor of ‘investor sentiment’ and, although Nixon doesn’t say this, or not in these terms, that cannot really be separated from international perceptions of post-Brexit Britain in a more general sense than that of particular policies; or, rather, that Brexit is the ‘meta-policy’ which defines those perceptions.

Brexit: structural change with no strategy

One acute, albeit almost unbearably depressing, account of that was provided recently by Sam Knight in a long essay in The New Yorker. One of its key sentences notes that “overnight, and against the will of its leaders, the country abandoned its economic model—as the Anglo-Saxon gateway to the world’s largest trading bloc—and replaced it with nothing at all.” It’s a damning but entirely accurate verdict, which doesn’t just apply to the economy, and even arch-Brexiters like Sherelle Jacobs are beginning to recognize it (£). True, she ascribes this to Britain being too cowardly to use its Brexit freedoms, rather than accepting these are illusory, but her conclusion, that we might as well re-join the EU as be effectively within its orbit but outside the security it provides, is an interesting straw in the wind as to how Brexiters may come to regard their project.

However, even if so, it is far too little and is already too late. Ever since the first post on this blog, I’ve been wary about trying to discern the deep impact of Brexit from individual events or, at least, to try to be careful to separate the two. In that post, I suggested that the referendum “vote was akin to dropping an economic depth charge: a huge splash, followed by an eery silence … that does not however mean that beneath the surface important things are and are not happening.” Admittedly, an ‘eery silence’ was perhaps not quite the right description, but the fundamental point was correct, and I made it again when the transition period ended, and I wrote about the need to “get ready for ‘Long Brexit’”. There, I used a better metaphor in saying that “what is underway is a fundamental shift in the ‘tectonic plates’ of the UK trading economy and its supply chains.”

It's still too early to identify all of what that shift is going to mean, but we can see how, beneath all the noise, there have already been structural changes in the British economy or sectors within it. To take examples from today’s post, that is evident in the differential impact of trade frictions on small and large businesses, the changes happening in agriculture, and the decline of the stock market. It may be that some of these don’t feed through into big changes in aggregate measures such as GDP growth – if, say, small importers of artisanal foods go to the wall that will barely register in such measures, but it will impinge horribly on those people’s lives, whilst making the lives of their erstwhile customers a little worse as well. Other structural changes are leaving a bigger mark on the aggregate data, as the many estimates of foregone growth attest.

Crucially, there is nothing positive to set against them. There are no, or almost no, ‘winners’ from Brexit, and certainly no benefits which, when set against costs, would show an aggregate positive. Nor is there any underlying strategy behind the structural changes that are occurring. Knight is right that there was no new economic model in 2016, and there is no such model now. The vague notion of ‘Global Britain’ never made any sense in a regionalized world, the deregulatory ‘Singapore-on-Thames’ agenda (leaving aside all its other problems) never had sufficient political support to be viable, and the idea of the UK as a kind of regulatory superpower in emergent technologies like AI was a fantasy. Even less persuasive is the idea that all three could be pursued simultaneously. What is left is a muddled confusion, which no one can articulate, let alone defend.

So, Labour?

No one expects the present government to develop such a strategy, as it slowly rots away into oblivion. Instead, all eyes rest upon what a Labour government might do, with that attention given new focus by Rachel Reeves’ recent Mais Lecture. About the most positive of the assessments of it came from Will Hutton in the Observer, who, despite finding Labour’s recent repeated retreats “disheartening”, saw the lecture as “an important moment” leaving him “upbeat and encouraged” that Starmer and Reeves might trigger an investment revolution, lower inequality and revive the green agenda when in government. However, rather more common were reactions such as those of the Financial Times’ Martin Wolf, whose reading of the lecture was that Labour’s “plans should not make things worse”, but questioned whether they can make things better.

The issue here isn’t just Brexit, in the narrow sense of the UK’s trading relationship with the EU, but it is inseparable from Brexit in terms of whether under Labour the UK can develop a viable post-Brexit national strategy. Doing so certainly entails normalizing the tone and deepening the content of UK-EU relations, and there’s every reason to think that will happen. That in itself, especially if in the context of a huge electoral victory, would help to establish a sense internationally that the country has returned to the kind of normality that has eluded recent Tory governments, and not just in terms of Brexit. Whether that is enough without a more profound change in the trading relationship than Labour has committed to is the big question.

Infuriating as it may be, this question is not going to be answered this side of the election, and the reason is very obvious simply from reading the front-page banner headline of a recent edition of the Express. Originally titled “Tory MPs warn voting for Reform UK will kill Brexit”, the article is a desperate plea to would-be Reform voters to back the Tories, including a warning from the Party's new Deputy Chairman Jonathan Gullis not to be “seduced” by Reform as that “will let Labour in through the back door”.

This is not a new message, and it is one which will be deployed ever-more vociferously as the election approaches, but at the moment it has little cut-through. For one thing, it can hardly be lost on its target audience that Gullis’s predecessor, Lee Anderson, used to say the same things - and then proceeded to join Reform. Indeed, to the extent that Gullis appears to see his “mate” Anderson as a role model – an astonishing possibility given Anderson’s thuggish mediocrity, and made plausible only by Gullis’s own – it would not be altogether surprising if he followed suit.

And this points to a more fundamental problem. For years now, MPs on the Tory Right like Gullis have been pushing views that are indistinguishable from those of Reform, whilst denouncing their own party for not being ‘real’ Conservatives. So asking voters now to back the Tories is hardly convincing, and even less so now, given the extraordinary intra-party cooperation between Anderson and some of his other Tory MP ‘mates’. Likewise, so often have such Tories denounced the Brexit delivered by their own government to be ‘Brexit in Name Only’ that it is hardly going to make much difference to leave voters if Starmer plans to continue in the same vein. Even the suggestion that Labour will “kill Brexit” may not mean much to voters who have already been told ad nauseam that it died long ago at the hands of the remainer Establishment.

In fact, one of the many reasons why the Brexiters have so comprehensively lost the battle for the post-Brexit narrative is their attempt to defend Brexit whilst simultaneously insisting that it hasn’t been done properly. Although what they mean by it is something different, that insistence has gifted Labour the line ‘make Brexit work’ (irritating and silly as it is) and, with that, a degree of cover for what could otherwise be depicted as undoing the success of ‘proper’ Brexit. However, that would change in an instant if Labour were to make a proposal for any kind of re-joining, including a customs union, rumours of which have been discussed and denied this week. Suddenly, the Tories would be given the best possible chance of capturing the Reform vote and of avoiding a heavy electoral defeat, if not even avoiding defeat entirely.

The flip-side is that Labour will have little or no mandate for seeking substantive changes in the EU trading relationship after the election. That might be less of a problem than some think if such changes were wrapped up in technical jargon, and agreed with the EU quickly, whilst the opposition was in disarray. It’s not exactly an appealing idea to anyone fastidious about democracy, but nor does it require an inordinate amount of cynicism to imagine. At all events, we are not going to know until the time comes, and if that is a fresh sign of the dishonesty that Brexit has brought to British politics, then it must be chalked up as yet another item on the seemingly endless list of Brexit damages.

And so we drift on – no, I haven’t forgotten where I started this post – in the apparently Timeless Test that is Brexit.