In the last fortnight, major examples include the latest report of the Hallett Inquiry into the Covid-19 pandemic, the sentencing of a former Reform official and UKIP/ Brexit Party MEP for taking Russian bribes, and, of course, the budget, as well as the latest net migration figures.
Brexit and Covid
The publication of the second module of the Hallett Inquiry, which focusses on decision-making and political governance, reveals a woeful picture. As has been widely reported it shows that a “toxic and chaotic” culture pervaded the Johnson-Cummings government. Whilst this had significant implications for the handling of the pandemic, which of course is the focus of the report, it shouldn’t be forgotten that it also has implications for Brexit.
I must admit that I haven’t read the full report, which runs to 800 pages, so I’m not sure what, if anything, it says about Brexit (the summary document makes no mention of it at all). However, as I wrote in some detail at the time, the evidence heard by the Inquiry showed several significant connections. That post also contains links to several posts I wrote during the pandemic which identified some of those connections and I won’t repeat all the points I’ve made previously but, in brief, they include:
· The damage Brexit had done to the machinery and processes of government, and especially to the civil service;
· The extent to which Brexit was prioritized over Covid in the early days of the pandemic;
· The refusal to extend the Transition Period, despite the impact of Covid throughout almost its entirety, with consequences both for the negotiations and the businesses which had to adapt, virtually overnight, to the eventual agreement;
· The ideational and institutional connections between Brexit and the response to Covid;
· The simplism and nostalgia evident in both Brexit and the pandemic.
At the most basic level, if, as the Inquiry shows, the government was “toxic and chaotic” in its handling of Covid, then it would be absurd to imagine that it was not equally so in its handling of Brexit. The same people, at the same time, could hardly have been governing in exemplary fashion in one domain whilst being so incompetent in the other. Moreover, the Johnson-Cummings government was itself a legacy of Brexit and, ultimately, of the Vote Leave campaign. In that sense, having so shambolic an administration when Covid struck was itself one of the adverse consequences of Brexit.
I don’t think the publication of the latest Hallett Report tells us anything new about this since it was, indeed, clear from the evidence the Inquiry heard, and from what could be surmised before. However, it is a moment worth recording that it is now a matter of official record just how incompetent that ‘get Brexit done’ government was. What is new, although entirely unsurprising, is the reaction it has provoked from Johnson and Cummings in particular, but also from the serried ranks for their supporters who, of course, are almost invariably Brexiters.
Thus, referring to Hallett as “some judge”, Johnson, who set up the Inquiry and set its terms of reference in the first place, dismissed the report (£) as “hopelessly incoherent” and “totally muddled”. Cummings, predictably, was even more vitriolic, accusing Hallett and the Inquiry’s lead lawyer of spreading lies and calling for both to “be stripped of all official jobs, all gongs, and legally barred from working in the law for the rest of their lives”. And David Frost called it a “disgrace”, complaining, amongst other things, that it “scoffs at the alternative strategy of the Great Barrington Declaration”, as if it had not been endlessly debunked, including by the government’s own Chief Medical Officer (similar complaints have been spewed out across the scientifically-illiterate ‘libertarian’ right).
Anyone with an ounce of self-awareness or humility might show just an iota of contrition, perhaps even some shame, when shown their failings in such forensic detail. But Johnson and Cummings, the one girdled by his sense of entitlement, the other by his misplaced intellectual vanity, are incapable of humility or shame. As for Frost, he shows the self-awareness of a toilet seat. One might as well expect Liz Truss to refrain from pontificating about “sensible economic policy”.
But the more important point is not their all-too-obvious personal inadequacies, it is that these mesh seamlessly with the doctrinaire refusal to accept responsibility which permeates their entire world-view. As with Nigel Farage, nothing is ever their fault. Thus, if there were ever to be a public inquiry into Brexit, it can be said, not speculatively but with certainty, that Johnson, Cummings, Frost, Farage, and all those who had leading roles within it, would never, ever accept the truth of the damage they did.
This matters, even though such a public inquiry is not in prospect, because it helps to explain why Brexitism persists in British politics, and why, as regards Brexit specifically, Britain is stuck in an impasse. On the face of it, that shouldn’t be so. There’s really no longer any room for doubt about the damage Brexit has done, most obviously economically, and no serious analyst claims otherwise. And public opinion has firmly turned against it. This leads some to suggest that it should be (relatively) easy to at least begin the process of ‘rejoining’. But there is no realistic route to that whilst a powerful phalanx of politicians and, perhaps as important, media owners and commentators remain as an obdurate, shameless, unrepentant blockage to it.
Brexit and Russia
There is also little sign of shame or penitence within Reform over the Gill scandal. As I mentioned in a recent post, in September Nathan Gill (formerly Reform’s leader in a Wales, UKIP’s leader in Wales, and a UKIP and Brexit Part MEP) pleaded guilty to eight counts of bribery from pro-Russian sources to act in their interests whilst he was serving as an MEP. Now, he has been sentenced to ten-and-a-half years in prison for these offences.
The length of that sentence serves to underscore just how serious his crimes were. This was not some minor lobbying scandal, but sustained corruption by an elected representative in the service, in effect, of a foreign, and none-too-friendly, power. After all, the offences for which he has been sentenced began in December 2018 and ran through to July 2019, whilst in March 2018 Russian agents committed the Novichok attacks in Salisbury. At all events, the police investigation of Gill was undertaken by the Metropolitan Police’s counter-terror team because, according to Commander Dominic Murphy, he had done “potential damage to national security”.
As I noted in that earlier post, Farage and other Reform leaders have been keen to distance themselves from Gill, and this week Zia Yusuf, the party’s head of policy, tried to dismiss Gill and his offences as “ancient history”. It won’t wash, not least as it was really not so long ago that he held a senior position in Reform. The full details of Gill’s offences are complex, but their timeline, and how they sit within the wider context of the Reform Party and its predecessors, as well as events in Russia and Ukraine, is painstakingly set out by The Nerve, a new independent media outlet [1]. As that report makes clear, there is no suggestion that Farage or other MEPs of his various parties took bribes, but some of those MEPs did say similar things to those which Gill was paid to say. My point is not that this implies any corruption on their part but that Gill was not saying things that ran contrary to views that were shared by his colleagues.
The police are now investigating other British former MEPs, who have (rightly) not been named, nor have the parties they represented, but, whilst these investigations may come to nothing, the political questions for Reform remain. Speaking to Sky News, Keir Starmer said that Farage “needs to launch an investigation into his party to understand how that [Gill’s offences] happened” and that this investigation should look into “what other links are there between Reform and Russia”. LibDem leader Ed Davey has been more forthright:
“A traitor was at the very top of Reform UK, aiding and abetting a foreign adversary. Nigel Farage and his party are a danger to national security. Nigel Farage himself was previously paid to be on Putin's TV channel, Russia Today, and said he was the world leader he admires the most. We must all ask – where do his loyalties really lie? We need a full investigation into Russian interference in our politics.”
At one level, all this is a reminder of the still unresolved question of what role Russia played in the 2016 Referendum – a question unresolved primarily because, according to the 2020 ‘Russia report’ by the Intelligence and Security Committee, the government did not investigate it. That report does show, though, that there was Russian interference in both the 2014 referendum on Scottish independence and the 2019 General Election, and, in general terms, that “the UK is clearly a target for Russian disinformation”. And, whatever Moscow’s role in the 2016 referendum, it has always been obvious that, at the very least, Brexit was advantageous to Russian interests in terms of destabilizing both the UK and the EU: “a giant victory for Putin’s foreign policy objectives”, as a former US Ambassador to Russia put it.
However, it is not necessary to disinter the referendum result to see the salience of Gill’s crimes for the politics of post-Brexit Britain. Except to those on the far-right and far-left of politics, the threat to the UK from Russia is clear and, if anything, escalating, as underlined by several incidents just in the last fortnight, including the incursion of the spy ship Yantar, which used lasers to disrupt the RAF planes tracking its movements, the interception of two Russian vessels in the Channel, and the discovery of a Russian submarine-spying device off the Welsh coast. And these events are just one manifestation of a much wider programme of physical and cyber-incursions amounting to what the former Head of MI5, the former Head of NATO, and the former Head of the Navy and Security Minister all regard an undeclared war.
The wider context of this, of course, is Ukraine, and the possibility that it will be forced into a humiliating ‘peace’ by Trump. With that, Putin would free up the resources, and feel emboldened, to step up the pressure against Europe - which very much includes the UK for, as the Brexiters used to remind us, ‘we are leaving the EU, we’re not leaving Europe’. This was perhaps the only true thing they ever said, and, as is now all too plain to see, Brexit has created an artificial and dangerous separation of the UK from its continent, made all the more dangerous because of Trump and what Trump means for NATO. As I’ve discussed in in the past, there is an obvious and disturbing axis between Putin, Trump, and Brexitism.
It is this context which makes the entire question of Farage’s foreign policy sympathies and allegiances, both as regards Putin and Trump, and his antipathies, as regards the EU, so important. He is, after all, presenting himself as the next Prime Minister and, as we are constantly reminded, his party is leading in the opinion polls. So these sympathies and allegiances, and those of all those within his party, as Gill recently was, are an absolutely legitimate matter for the most intense scrutiny, despite Reform’s attempts to shout down such scrutiny or to depict Gill as a ‘bad apple’ whose behaviour had nothing to do with the party.
Farage has said he will not investigate any Russian links within his party and dismissed the Gill case as “a minor embarrassment”. But no other British politician has been convicted of such offences in modern times (there have been some imprisonments for false accounting over expenses, but that isn’t remotely the same). Perhaps the central claim made by Brexiters was that leaving the EU would mean that voters would be free to hire and fire those who made the laws that governed them. To do that, we need to know the allegiances of those who would make our laws.
Brexit and the Budget
If the run-up to this week’s budget is anything to go by, then the allegiance of our current governing lawmakers is to being as politically maladroit as possible. I certainly can’t remember anything like it. Budget ‘purdah’ has been more honoured in the breach than the observance for some time but, even leaving aside the Office for Budget Responsibility’s (OBR) inadvertent revelation of its measures a few minutes before the Chancellor’s speech, the last few months of semi-statement have gone well beyond the now-familiar leaks and hints.
During that apparently almost interminable period, it has been notable that both Rachel Reeves and other government ministers have been increasingly open in identifying Brexit as a cause of Britain’s economic woes. This is a marked change to the far more muted references to it at the time of last year’s budget. But it is still being framed as a problem in the way Brexit was done rather than one of Brexit itself. As Rafael Behr puts it, “the problem is couched as negligent negotiation, not strategic miscalculation”.
That framing was evident in Reeves’ budget speech, which rather shamelessly implied that a new trade deal had been struck with the EU (presumably referring to the ‘reset’, the terms of which remain under negotiation). She also implied an endorsement of the Brexiters’ claim that it is of benefit to have an independent trade policy by speaking referring to deals with the US (which, unless I’ve missed something, has still only been partially implemented, and is in any case only a partial mitigation of Trump’s new tariffs, not a Free Trade Agreement) and with India (which has an estimated value of 0.13% of GDP after 15 years).
It certainly can’t be claimed that any trade policy independence Brexit has brought comes close to compensating for the fact that, as Reeves mentioned, Brexit continues to be identified by the OBR as a drag on UK productivity. Indeed, the OBR itself refers to our great act of national liberation as being one of the “successive shocks” that are responsible for the country’s lack of productivity growth. This latest report also renews the OBR’s “assessment that Brexit will reduce the level of UK productivity by around 4 per cent after 15 years” compared with what it would otherwise have been [2]. As always, it’s worth remembering that this figure (which also implies, as widely quoted, that GDP will be 4% less than otherwise) has a cumulative effect. That is, for each of the 15 years productivity will be lower than it would have been by some figure, reaching 4% in the fifteenth year.
It's true that the OBR did not change its assessment of the Brexit damage for the worse (as had been rumoured prior to the budget, although it did downgrade its overall productivity growth assessment), but the fact that it remains unchanged is significant. It suggests that even as it moves from being entirely a forecast of damage that will be done to being, in part, an estimate of damage that has been done, that forecast seems to the OBR to be holding true. If so, that is not a surprise, as most analysts expect the bulk of the damage will have occurred early in the 15-year period.
Indeed, as summarized in my last post, a recent report from the National Bureau for Economic Research provides a headline estimate suggesting that by 2025 (i.e. already), UK GDP is 6%-8% less than it would otherwise have been. In the run-up to the budget, the LibDem Party requested the House of Commons Library to provide an analysis the implications of that estimate, including for tax revenues. The results were that it would mean that, had it not been for Brexit, in 2024-25 tax revenues would have been between £65 billion and £90 billion higher than they actually were.
If the upper figure were correct, it would be equivalent to the entirety of government spending in that year on education (£89.2 billion). But suppose the true figure were only half of the upper estimate, that would still more than cover the entire defence budget (£37.5 billion). Now suppose the true figure were only a quarter of the lower estimate: then, it would cover the entire 2024-25 budget for both day-to-day spending and capital investment for prisons, the probation service and the criminal justice system (£14.7 billion).
Brexit and immigration
All that is another reminder of the high price we are paying for the stupidity of Brexit, to which should be added the negative impact on tax revenues which can be expected as a result of the large fall in net migration announced yesterday. That announcement, in itself, means that the OBR’s budget forecasts for growth and tax revenue, published just the day before, are likely to be over-optimistic, since it had assumed a less steep fall.
Calculating the impact on tax revenues of falling net migration is extremely complex, because it depends on a large number of variables, but last year the OBR estimated that a fall of 100,000 would increase the deficit by £7 billion. Given the complexity, I’m not sure whether it would be justified to extrapolate from that to say that yesterday’s fall of almost 450,000 in the last 12 months might represent something in the order of a £30 billion reduction in tax revenue, but the impact will certainly be considerable and negative.
And yet, responding to these latest net migration figures, Home Secretary Shabana Mahmood said the government would be “going further” to clamp down on immigration, because of the “immense pressure” it supposedly puts on local communities, whilst Keir Starmer said the figures were (only) “a step in the right direction”. Presumably, Mahmood and Starmer believe they will get some political credit for responding to the ‘legitimate concerns’ of the public, whatever the economic (and human) cost. If so, they are likely to be disappointed: this latest fall continues from that of last year yet, in post-Brexit Britain’s immigration panic, the majority of the public believe that net migration rose in that year, even as they bemoan the tax rises in this year’s budget.
As the broadcaster and author James O’Brien put it when discussing this issue, “we have become a ludicrous country”. And Brexit, which, remember, was supposed to ‘solve’ these ‘legitimate concerns’, has made us even more ludicrous.
Still on the Brexit rack
Five years ago, almost to the day, I wrote a post discussing the chaotic mess we were in (of which there is plenty more in the posts from that time). Amidst Covid, with the transition period almost over, the Trade and Cooperation Agreement had yet to be finalised and there was every possibility there would be no agreement at all. There’s much in that post which is no longer of great relevance, but it does capture the disarray of the time, which the Hallett report reminds us of. For example, I referred to a leaked letter from the Road Haulage Association, describing the process of working with the government on border issues as “a complete shambles”.
There are other things in that post which are still very much relevant, ranging from the narrowly technical (e.g. my observation that “there will be a myriad of things left in the air even if there is a deal [such as] carbon trading”) to the broadly political (e.g. Keir Starmer’s “near silence” about Brexit and the rumours – which turned out to be true – that he would want Labour MPs to vote for any deal which might be done). At all events, I finished the post by saying:
“Perhaps we need to look instead to Classical mythology to describe our situation, maybe to Sisyphus endlessly rolling his rock up the hill or, as seems more appropriate to the painfulness of it all, poor old Prometheus having his liver pecked out by an eagle day after day. Prometheus of course was being punished for having stolen fire from the gods and given it to humans, and Sisyphus was an all-round bad egg (murdering, cheating, and generally getting above himself). It is not clear what crime we have committed to have to endure the endless torture of Brexit.”
The current news is a reminder that these words still apply.
Notes
[1] There are so many such outlets now that it is always important to look carefully at their credibility, but The Nerve certainly has a good pedigree, having been created by a collective of five former Guardian and Observer journalists. In any case, as regards the report referred to, it collates verifiable information from within the public domain.
[2] For a detailed discussion of the OBR estimate, and assessments of the costs of Brexit generally, see John Springford’s June 2025 report for the Constitution Society/ Federal Trust.
This matters, even though such a public inquiry is not in prospect, because it helps to explain why Brexitism persists in British politics, and why, as regards Brexit specifically, Britain is stuck in an impasse. On the face of it, that shouldn’t be so. There’s really no longer any room for doubt about the damage Brexit has done, most obviously economically, and no serious analyst claims otherwise. And public opinion has firmly turned against it. This leads some to suggest that it should be (relatively) easy to at least begin the process of ‘rejoining’. But there is no realistic route to that whilst a powerful phalanx of politicians and, perhaps as important, media owners and commentators remain as an obdurate, shameless, unrepentant blockage to it.
Brexit and Russia
There is also little sign of shame or penitence within Reform over the Gill scandal. As I mentioned in a recent post, in September Nathan Gill (formerly Reform’s leader in a Wales, UKIP’s leader in Wales, and a UKIP and Brexit Part MEP) pleaded guilty to eight counts of bribery from pro-Russian sources to act in their interests whilst he was serving as an MEP. Now, he has been sentenced to ten-and-a-half years in prison for these offences.
The length of that sentence serves to underscore just how serious his crimes were. This was not some minor lobbying scandal, but sustained corruption by an elected representative in the service, in effect, of a foreign, and none-too-friendly, power. After all, the offences for which he has been sentenced began in December 2018 and ran through to July 2019, whilst in March 2018 Russian agents committed the Novichok attacks in Salisbury. At all events, the police investigation of Gill was undertaken by the Metropolitan Police’s counter-terror team because, according to Commander Dominic Murphy, he had done “potential damage to national security”.
As I noted in that earlier post, Farage and other Reform leaders have been keen to distance themselves from Gill, and this week Zia Yusuf, the party’s head of policy, tried to dismiss Gill and his offences as “ancient history”. It won’t wash, not least as it was really not so long ago that he held a senior position in Reform. The full details of Gill’s offences are complex, but their timeline, and how they sit within the wider context of the Reform Party and its predecessors, as well as events in Russia and Ukraine, is painstakingly set out by The Nerve, a new independent media outlet [1]. As that report makes clear, there is no suggestion that Farage or other MEPs of his various parties took bribes, but some of those MEPs did say similar things to those which Gill was paid to say. My point is not that this implies any corruption on their part but that Gill was not saying things that ran contrary to views that were shared by his colleagues.
The police are now investigating other British former MEPs, who have (rightly) not been named, nor have the parties they represented, but, whilst these investigations may come to nothing, the political questions for Reform remain. Speaking to Sky News, Keir Starmer said that Farage “needs to launch an investigation into his party to understand how that [Gill’s offences] happened” and that this investigation should look into “what other links are there between Reform and Russia”. LibDem leader Ed Davey has been more forthright:
“A traitor was at the very top of Reform UK, aiding and abetting a foreign adversary. Nigel Farage and his party are a danger to national security. Nigel Farage himself was previously paid to be on Putin's TV channel, Russia Today, and said he was the world leader he admires the most. We must all ask – where do his loyalties really lie? We need a full investigation into Russian interference in our politics.”
At one level, all this is a reminder of the still unresolved question of what role Russia played in the 2016 Referendum – a question unresolved primarily because, according to the 2020 ‘Russia report’ by the Intelligence and Security Committee, the government did not investigate it. That report does show, though, that there was Russian interference in both the 2014 referendum on Scottish independence and the 2019 General Election, and, in general terms, that “the UK is clearly a target for Russian disinformation”. And, whatever Moscow’s role in the 2016 referendum, it has always been obvious that, at the very least, Brexit was advantageous to Russian interests in terms of destabilizing both the UK and the EU: “a giant victory for Putin’s foreign policy objectives”, as a former US Ambassador to Russia put it.
However, it is not necessary to disinter the referendum result to see the salience of Gill’s crimes for the politics of post-Brexit Britain. Except to those on the far-right and far-left of politics, the threat to the UK from Russia is clear and, if anything, escalating, as underlined by several incidents just in the last fortnight, including the incursion of the spy ship Yantar, which used lasers to disrupt the RAF planes tracking its movements, the interception of two Russian vessels in the Channel, and the discovery of a Russian submarine-spying device off the Welsh coast. And these events are just one manifestation of a much wider programme of physical and cyber-incursions amounting to what the former Head of MI5, the former Head of NATO, and the former Head of the Navy and Security Minister all regard an undeclared war.
The wider context of this, of course, is Ukraine, and the possibility that it will be forced into a humiliating ‘peace’ by Trump. With that, Putin would free up the resources, and feel emboldened, to step up the pressure against Europe - which very much includes the UK for, as the Brexiters used to remind us, ‘we are leaving the EU, we’re not leaving Europe’. This was perhaps the only true thing they ever said, and, as is now all too plain to see, Brexit has created an artificial and dangerous separation of the UK from its continent, made all the more dangerous because of Trump and what Trump means for NATO. As I’ve discussed in in the past, there is an obvious and disturbing axis between Putin, Trump, and Brexitism.
It is this context which makes the entire question of Farage’s foreign policy sympathies and allegiances, both as regards Putin and Trump, and his antipathies, as regards the EU, so important. He is, after all, presenting himself as the next Prime Minister and, as we are constantly reminded, his party is leading in the opinion polls. So these sympathies and allegiances, and those of all those within his party, as Gill recently was, are an absolutely legitimate matter for the most intense scrutiny, despite Reform’s attempts to shout down such scrutiny or to depict Gill as a ‘bad apple’ whose behaviour had nothing to do with the party.
Farage has said he will not investigate any Russian links within his party and dismissed the Gill case as “a minor embarrassment”. But no other British politician has been convicted of such offences in modern times (there have been some imprisonments for false accounting over expenses, but that isn’t remotely the same). Perhaps the central claim made by Brexiters was that leaving the EU would mean that voters would be free to hire and fire those who made the laws that governed them. To do that, we need to know the allegiances of those who would make our laws.
Brexit and the Budget
If the run-up to this week’s budget is anything to go by, then the allegiance of our current governing lawmakers is to being as politically maladroit as possible. I certainly can’t remember anything like it. Budget ‘purdah’ has been more honoured in the breach than the observance for some time but, even leaving aside the Office for Budget Responsibility’s (OBR) inadvertent revelation of its measures a few minutes before the Chancellor’s speech, the last few months of semi-statement have gone well beyond the now-familiar leaks and hints.
During that apparently almost interminable period, it has been notable that both Rachel Reeves and other government ministers have been increasingly open in identifying Brexit as a cause of Britain’s economic woes. This is a marked change to the far more muted references to it at the time of last year’s budget. But it is still being framed as a problem in the way Brexit was done rather than one of Brexit itself. As Rafael Behr puts it, “the problem is couched as negligent negotiation, not strategic miscalculation”.
That framing was evident in Reeves’ budget speech, which rather shamelessly implied that a new trade deal had been struck with the EU (presumably referring to the ‘reset’, the terms of which remain under negotiation). She also implied an endorsement of the Brexiters’ claim that it is of benefit to have an independent trade policy by speaking referring to deals with the US (which, unless I’ve missed something, has still only been partially implemented, and is in any case only a partial mitigation of Trump’s new tariffs, not a Free Trade Agreement) and with India (which has an estimated value of 0.13% of GDP after 15 years).
It certainly can’t be claimed that any trade policy independence Brexit has brought comes close to compensating for the fact that, as Reeves mentioned, Brexit continues to be identified by the OBR as a drag on UK productivity. Indeed, the OBR itself refers to our great act of national liberation as being one of the “successive shocks” that are responsible for the country’s lack of productivity growth. This latest report also renews the OBR’s “assessment that Brexit will reduce the level of UK productivity by around 4 per cent after 15 years” compared with what it would otherwise have been [2]. As always, it’s worth remembering that this figure (which also implies, as widely quoted, that GDP will be 4% less than otherwise) has a cumulative effect. That is, for each of the 15 years productivity will be lower than it would have been by some figure, reaching 4% in the fifteenth year.
It's true that the OBR did not change its assessment of the Brexit damage for the worse (as had been rumoured prior to the budget, although it did downgrade its overall productivity growth assessment), but the fact that it remains unchanged is significant. It suggests that even as it moves from being entirely a forecast of damage that will be done to being, in part, an estimate of damage that has been done, that forecast seems to the OBR to be holding true. If so, that is not a surprise, as most analysts expect the bulk of the damage will have occurred early in the 15-year period.
Indeed, as summarized in my last post, a recent report from the National Bureau for Economic Research provides a headline estimate suggesting that by 2025 (i.e. already), UK GDP is 6%-8% less than it would otherwise have been. In the run-up to the budget, the LibDem Party requested the House of Commons Library to provide an analysis the implications of that estimate, including for tax revenues. The results were that it would mean that, had it not been for Brexit, in 2024-25 tax revenues would have been between £65 billion and £90 billion higher than they actually were.
If the upper figure were correct, it would be equivalent to the entirety of government spending in that year on education (£89.2 billion). But suppose the true figure were only half of the upper estimate, that would still more than cover the entire defence budget (£37.5 billion). Now suppose the true figure were only a quarter of the lower estimate: then, it would cover the entire 2024-25 budget for both day-to-day spending and capital investment for prisons, the probation service and the criminal justice system (£14.7 billion).
Brexit and immigration
All that is another reminder of the high price we are paying for the stupidity of Brexit, to which should be added the negative impact on tax revenues which can be expected as a result of the large fall in net migration announced yesterday. That announcement, in itself, means that the OBR’s budget forecasts for growth and tax revenue, published just the day before, are likely to be over-optimistic, since it had assumed a less steep fall.
Calculating the impact on tax revenues of falling net migration is extremely complex, because it depends on a large number of variables, but last year the OBR estimated that a fall of 100,000 would increase the deficit by £7 billion. Given the complexity, I’m not sure whether it would be justified to extrapolate from that to say that yesterday’s fall of almost 450,000 in the last 12 months might represent something in the order of a £30 billion reduction in tax revenue, but the impact will certainly be considerable and negative.
And yet, responding to these latest net migration figures, Home Secretary Shabana Mahmood said the government would be “going further” to clamp down on immigration, because of the “immense pressure” it supposedly puts on local communities, whilst Keir Starmer said the figures were (only) “a step in the right direction”. Presumably, Mahmood and Starmer believe they will get some political credit for responding to the ‘legitimate concerns’ of the public, whatever the economic (and human) cost. If so, they are likely to be disappointed: this latest fall continues from that of last year yet, in post-Brexit Britain’s immigration panic, the majority of the public believe that net migration rose in that year, even as they bemoan the tax rises in this year’s budget.
As the broadcaster and author James O’Brien put it when discussing this issue, “we have become a ludicrous country”. And Brexit, which, remember, was supposed to ‘solve’ these ‘legitimate concerns’, has made us even more ludicrous.
Still on the Brexit rack
Five years ago, almost to the day, I wrote a post discussing the chaotic mess we were in (of which there is plenty more in the posts from that time). Amidst Covid, with the transition period almost over, the Trade and Cooperation Agreement had yet to be finalised and there was every possibility there would be no agreement at all. There’s much in that post which is no longer of great relevance, but it does capture the disarray of the time, which the Hallett report reminds us of. For example, I referred to a leaked letter from the Road Haulage Association, describing the process of working with the government on border issues as “a complete shambles”.
There are other things in that post which are still very much relevant, ranging from the narrowly technical (e.g. my observation that “there will be a myriad of things left in the air even if there is a deal [such as] carbon trading”) to the broadly political (e.g. Keir Starmer’s “near silence” about Brexit and the rumours – which turned out to be true – that he would want Labour MPs to vote for any deal which might be done). At all events, I finished the post by saying:
“Perhaps we need to look instead to Classical mythology to describe our situation, maybe to Sisyphus endlessly rolling his rock up the hill or, as seems more appropriate to the painfulness of it all, poor old Prometheus having his liver pecked out by an eagle day after day. Prometheus of course was being punished for having stolen fire from the gods and given it to humans, and Sisyphus was an all-round bad egg (murdering, cheating, and generally getting above himself). It is not clear what crime we have committed to have to endure the endless torture of Brexit.”
The current news is a reminder that these words still apply.
Notes
[1] There are so many such outlets now that it is always important to look carefully at their credibility, but The Nerve certainly has a good pedigree, having been created by a collective of five former Guardian and Observer journalists. In any case, as regards the report referred to, it collates verifiable information from within the public domain.
[2] For a detailed discussion of the OBR estimate, and assessments of the costs of Brexit generally, see John Springford’s June 2025 report for the Constitution Society/ Federal Trust.
