After the Brexit reset, how about a Brexit review?

Very much as anticipated in my previous post, the ‘reset Summit’ has come and gone as if it were simply a passing event. There has certainly been little political or media follow-up to what was announced, once the flurry of Brexiter fury had died down. Perhaps that is in part because, as John Elledge points out in the New Statesman, that fury, and the screaming headlines it gave rise to in the pro-Brexit press, simply isn’t matched by public opinion. The same seems to be true of attempts to whip up fears of Brexit ‘sabotage’ over the Product Regulation and Metrology Bill, which passed its third reading this week.

That’s partly because, as Elledge says, in general terms the public tends to support closer ties with the EU, but I suspect it’s also because the public don’t really care that much either way. It is striking that every poll on the reset, whether conducted before the Summit or afterwards, shows high numbers of ‘don’t knows’, usually about 30% of respondents. Moreover, the YouGov post-summit poll shows that as well as 30% who ‘don’t know’, another 16% think that ‘the deal’ agreed is neither good nor bad. I also suspect that even those who oppose it struggle to muster the angry energy of the headline writers.

Actually, in this case at least, a ‘don’t know’ response is not necessarily a reflection of the public’s disinclination to be acquainted with the facts. It would be a perfectly reasonable response from even the most assiduous and well-informed voter. For, as I highlighted in that previous post, all that has really been announced of ‘the deal’ is a whole series of discrete potential agreements between the UK and the EU, but without almost any announced processes or timetables for their negotiation, let alone for their completion.

An SPS agreement?

The most important of the possible economic agreements, at least from the perspective of the Labour government’s explicitly stated reset aims, is a Sanitary and Phytosanitary (SPS) agreement. On that, my assumption that the government would take the possibility of its completion to justify the further postponement of full import controls on goods coming from the EU has been proved correct. Thus it was announced this week that the next phase of controls, which after several delays was meant to be implemented in July, has been paused, in effect indefinitely although the government press release stated they are deferred until January 2027 [1].

It's worth standing back from this latest announcement to recall just how ridiculous the situation is. Successive British governments, having embarked on Brexit with a referendum held almost nine years ago, and having fairly soon decided that this meant ‘hard Brexit’, went on to delude themselves and to mislead the public about the fact that this was going to entail import controls. Indeed it was not until February 2020 that any Cabinet Minister, specifically Michael Gove, formally and publicly stated that import controls would have to be introduced. By that time, Britain had already left the EU and was in the transition period, a transition period which the government had previously resisted and which it refused, despite the pandemic, to extend.

Since Gove’s announcement, there have been years of preparations, with huge costs for both government and businesses, and so many delays and multiple phasings, with different delays to the different phasings, that it is all but impossible to catalogue them in their entirety (see my post of April 2024 and the links within it for some of the detail). Meanwhile, the EU was ready to introduce controls on imports from Great Britain on the day after the transition period ended (to complaints from Gove about EU ‘over-rigidity’).

SPS controls, or even import controls generally, are not, in themselves, amongst the biggest costs or consequences of Brexit (an SPS deal is estimated to be worth less than 0.1% of UK GDP per annum) although they have proved to be one of the costs the UK has been most unwilling to pay. But the whole saga, and the fact that it is still playing out with this new supposed deadline being set for well into the next parliament, is a potent symbol of the utter ignorance, incompetence and dishonesty that has characterised Brexit as a whole. It certainly, in various ways, makes a mockery of the slogan about ‘taking back control of our money, our borders, and our laws’ if, indeed, anything more than the slogan itself were needed to induce mockery.

Risks and reactions

Coming back to the specific issue of the latest postponement, a few points stand out. One is the now familiar one that the lack of full import controls constitutes a risk which will now continue for even longer. As I noted in my last post, it will certainly be months, and very possibly years, before an SPS deal is both agreed and implemented and, meanwhile, Great Britain (but not Northern Ireland) risks importing shoddy or dangerous goods. For reasons I’ve discussed before, that isn’t because EU products have ‘ceased to be safe’. It is because the UK no longer has full access to the ‘eco-system’ relevant databases, and as a result is more vulnerable to accidental or criminal introductions of, for example, animal diseases, African Swine Fever being the most high-profile example.

From this point of view, reported food industry concerns that an SPS deal would increase those risks, because it would ultimately enable the UK to remove those phases of the post-Brexit import controls which have been introduced, are wide of the mark. If and when any such deal is done, it would, according to paragraph 31 of the statement released after the reset Summit, include full database access and thereby return risks to pre-Brexit levels (or to the same level as for member states of the EU which, of course, can never be zero). The real concern is that, meanwhile, the remainder of the necessary import controls will remain unimplemented.

If some have misunderstood the implications of an SPS deal, others have been wrong-footed by it. A particularly delicious example is an article in the rabidly pro-Brexit Express. Those who only read the headline, “‘Brexit reset deal’ to hit grocery bills next month – how it affects your pockets”, could be forgiven for thinking that Starmer’s craven betrayal of the Brexit dream was about to hit hard-pressed consumers in their wallets. But - what’s this? – the report goes on to explain that it will reduce business costs by £200 million a year, which will “gradually work its way down to consumers” who will see lower prices and greater availability of produce. Some “hit” [2].

All this aside, there was something decidedly odd about the announcement. The fact that the government is not going to continue to develop full border controls, and may even start selling off some of the ‘white elephant’ border facilities, seems to suggest either that it is completely confident of reaching an SPS agreement with the EU (which is exactly how the press release reads) and/or that it is determined to do whatever is necessary to reach such an agreement. Much of the media discussion certainly talks as if the deal already exists or is at least a fait accompli.

In fact, as things stand there is no agreement and, although I think it is very highly likely that there will be, it is impossible to be certain or to know how long it will take. If there is no agreement, and in the meantime there has been no further development of import controls, then there will be an even longer period until full controls are operational. They certainly aren’t going to spring into action in January 2027, the supposed new deadline. But even if there is an agreement, the longer it takes to be made and implemented the greater the chance that the risks involved will eventuate and that, in turn, carries a political risk for the government [3].

A detour into Brexitology

One thing which can be said about an SPS agreement, if it happens, or any of the others identified at the reset Summit, is that neither it nor they will constitute ‘cherry-picking’. I’m returning to this point reluctantly since, as I said when I last discussed it, my original passing remark about it, in a footnote to an earlier post, led to much critical, and some hostile, comment on social media.

My basic argument is that this term has now ceased to have analytical value because, now that the UK is a third country to the EU, any agreements made will simply be between those two polities, in the light of their own interests. Some seemed to think this showed my supposed ‘UK-centrism’, and perhaps even my own hidden Brexity nature, or was just some inexplicable lapse from cogency on my part. All of which seems rather strange given that for almost ten years I’ve been writing about cherry-picking (and related concepts like ‘cakeism’), repeatedly using it as a concept to analyse Brexit and to criticise the UK’s conduct.

I only return to this now because last week no less a person than the EU Ambassador to the UK, Pedro Serrano, described the term as being “no longer helpful” and went on to say of the reset that “this is not about cherry-picking or not cherry-picking. We have identified a number of issues that are of mutual interest.” The report of these remarks, by Jon Stone in Politico, goes on to say that “in the Berlaymont, too, the [cherry-picking] line is seen as passé”, although gives no specific evidence of that and it’s not clear to me that, as the report claims, this term has been “officially retired” by the EU (or what form ‘official retirement’ would take). Nevertheless, it is clearly significant that someone of Serrano’s stature said what he did and, unless the suggestion is that his posting to London has made him fall prey to ‘UK-centrism’, it suggests that my own observation was an accurate one.

Moreover, the report goes on to quote Charles Grant, the widely-respected Director of the Centre for European Reform, saying that the cherry-picking line had been “a product of the strained relationship that followed the referendum, and the EU’s concern that other countries should not follow the UK’s example.” That is exactly my point, or part of it: not just the word, but the concept, relate to a time which legally and institutionally has ceased to exist, namely the period during which the Withdrawal Agreement and the Trade and Cooperation Agreement were being negotiated.

This isn’t (or isn’t simply) an ‘I told you so’ on my part (and, even if it were, there are plenty of things, often more important than this, which I’ve been wrong about over the years). Actually, it’s a fairly minor issue which I never expected to cause so much fuss. Nevertheless, it does have a wider significance which is worth mentioning.

It has become almost a truism of ‘Brexitology’ (for there is such a thing) that Brexit is a ‘process not an event’, an observation only ever necessary to make because of the bone-headed inability of most Brexiters to grasp that simple fact. But that doesn’t mean that the process ‘unfolds’ in the sense of going in a particular direction, like the unrolling of a carpet to reveal a recurring pattern. For whilst it is undoubtedly true that there are endless recurrences and repetitions – to a degree that is sometimes almost soul-destroying – it is also the case that the direction and content of the process modulates over time, and will continue to do so. As that happens, anyone who is serious about understanding Brexit needs to be attuned to both the continuities and the changes.

I think that most readers of this blog would have no difficulty agreeing with the suggestion that those Brexiters who are still, for example, droning on about ‘alternative arrangements’ for the Irish border are simply stuck in a groove whereby not just the terminology but the entire situation it relates to have been superseded. What may be less palatable is that the same can apply to some of the idées fixes of those on the ‘remain’, ‘rejoin’, ‘FBPE’ (or whatever term we want to use for it) side.

The Strategic Defence Review

One important reason why the Brexit process does not have a single fixed direction, mandating a fixed repertoire of analytical terms, is that this process does not take place in isolation from the wider world. The most obvious example is the Ukraine War, which has had a profound impact on UK-EU post-Brexit relations ever since its outbreak in 2022. That impact continues to develop, and is itself one of the things impacted by the other most obvious example, Trump’s second presidency. The EU-UK Security and Defence Partnership, announced at the reset Summit, is the most tangible consequence of these two developments.

The Ukraine War had already prompted the 2023 ‘refreshed’ Integrated Review of Security, Defence, Development and Foreign Policy (IR23). As I discussed at the time, this represented something of a retreat from the hubris of the original Integrated Review of 2021 (IR21) with its puffed-up post-Brexit ‘Global Britain’ framing, and put more emphasis on the centrality of European-Atlantic security. Now, just two years later, the government has published its Strategic Defence Review (SDR).

I’m not qualified to discuss the military details of the SDR, for which see Professor Lawrence Freedman’s expert analysis, but, on my reading of its geo-political framing, it does not really continue the direction of travel from IR21 to IR23. It is true that, as Freedman explains, the SDR is very much informed by the threat from Russia and by the military lessons of the Ukraine War. It is also true that it does not explicitly replicate the ‘Global Britain’ language of IR21. Nevertheless, it retains a strong emphasis on the UK as a global military power, centrally anchored in its relationship with the US and its membership of NATO.

Of course, that is not a surprise, any more than it is a surprise that it is only very gently hinted at that the reliability of the US as a defence partner has been compromised by Trump, and may well never recover. But it is, if not surprising then at least of note, that the partnership with the EU is given so little emphasis, and even that in rather muted tones (see especially p.75). In the process, what had seemed in IR23 to be the beginning of a recognition that the UK is primarily a regional power has been diluted. It’s difficult to be sure, precisely as so much is about tone and emphasis, and thus very much open to different interpretations, but, at the very least, I don’t think it is suggestive of the kind of Europe-first foreign policy which Foreign Secretary David Lammy talked about in Opposition.

A different review?

That rather tentative analysis aside, the SDR prompts the thought that, whatever it does or does not imply about the UK-EU defence partnership, there is literally nothing in it which could not, and probably would not, have been written had Brexit not happened. AUKUS, which features extensively in the review, is sometimes trumpeted by Brexiters as a ‘Brexit benefit’, but the fact that France, an EU member, was originally to have been the US and Australia’s partner gives the lie to that. But if Brexit has brought no defence and security benefits, what costs and disbenefits might it have brought?

In particular, whilst, like the other recent reviews, the SDR rightly identifies the threat Russia poses to the UK, and the very wide-ranging forms it takes, the entire question about how Brexit relates to this threat remains one of the major unventilated issues of recent history. I’ve never been one of those who ascribes the referendum result to Russian interference and, in some ways, I think doing so serves to deflect responsibility from those, including the voters, with whom it lies. But it is undeniable that Brexit was in line with Russian interests, and we know the pro-Putin views of many of its leading advocates, including Nigel Farage.

At issue here is not so much the failure to investigate what role Russia played in 2016, it is how, right now, in 2025, and in the future, Brexit continues to serve those interests. We are told that the SDR puts the UK on a “wartime footing” in the face of the “immediate and pressing threat” from Russia. A country which was really serious about that would be conducting a review not just of defence strategy but of why it is persisting with an entire national strategy which may not have been chosen for it by Russia but is exactly what Russia would have chosen for it. Whilst we are at it, we might also undertake a comprehensive official review of all the economic and political consequences of Brexit.

After all, if the dramatic changes in the world are such as to require three defence reviews in the five years since Britain formally left the EU, then it surely isn’t unreasonable to think that Brexit itself warrants at least one.

Notes

[1] Apart from at least recognizing that an SPS deal may not be done, the reason a date is stated is very likely in order to forestall any action against the UK at the WTO. As things stand, the UK is discriminating against non-EU countries, whose imports face SPS controls. But for so long as the UK can claim to be in the process of introducing controls on the EU and negotiating a deal with the EU, it is unlikely that any other WTO member will bother to start raising a complaint.

[2] In another article, even the Express couldn’t find a negative spin to put on one aspect of the potential SPS deal, namely that it would make it easier to take pets to and from the EU by a “reversal to Brexit rules”. This possible return to the pet passport scheme shouldn’t be confused with another development this week, introducing the Pet Travel Document to simplify taking pets between Great Britain and Northern Ireland. That is nothing to do with the reset or any SPS agreement, but is part of the ongoing implementation of the Windsor Framework.

[3] Of course there are political risks either way. If the government continued to roll out import controls which, along with those already developed, were subsequently rendered redundant by an SPS agreement then it could be accused of wasting money. Even so, that would be considerably less damaging (both politically and economically) than if, prior to an agreement, the absence of full controls led to, say, foot and mouth disease being imported.

Accommodating Brexit

Are there any expressions other than ‘the elephant in the room’ to connote the ignoring of big, obvious things? If so, it would be useful to know them as that poor old elephant is now the most clichéd of clichés to describe the government’s attitude to Brexit. In their speeches to this week’s Labour Party conference, Rachel Reeves mentioned it only briefly and in passing, and Keir Starmer not at all. It’s absurd, especially as the guiding theme of both speeches, as of the government’s entire incoming communications message, is that of the dire inheritance bequeathed by its Tory predecessors. Brexit can hardly be excluded from that reckoning.

It's tedious to go on and on making that observation, and it’s certainly not made with any surprise on my part that Nellie is still ignored in the corner, but it remains a necessary one, for two reasons. One is because, mentioned or not, Brexit continues week-in and week-out to exert its damaging effects. Ignoring them doesn’t make them go away. The other is that, in the continued absence of discernible post-Brexit strategy, this means that the government’s approach is one of ‘accommodating’ Brexit. That is perhaps slightly different to ignoring Brexit, as it is a kind of acknowledgement of Jumbo’s existence alongside a dogged determination to live with it.  

The ongoing damage of Brexit

As for the first of these, the latest news on the economic damage of Brexit comes with a new study by Professor Jun Du and others of Aston University. Apart from providing new evidence of the already well-attested “profound and ongoing” dampening effect of post-Brexit trade barriers on UK-EU goods trade, it identifies two, more specific, things. One is the particular effect of reducing the varieties of goods traded, sharply and continuously in the case of UK exports to the EU; declining, sharply recovering, then slowly declining again in the case of UK imports from the EU.

My reading, although it isn’t stated quite in these terms in the report, is that what has happened is that small product lines (and especially those of smaller firms) have simply been dropped as not being worth the extra costs. That has happened continuously as regard UK exports because the EU introduced full import controls immediately. In the other direction, it was discontinuous presumably because the initial impact of customs and VAT charges had an immediate effect, which was then adjusted to, but more recently the gradual introduction of UK import controls has produced a new decline.

Whatever the process, the result is that specialist products are now less likely to be traded. That has an economic impact on the firms affected, of course, but it also reduces consumer choice, with effects which are not just economic but adversely affect quality of life. Delicatessens are a good example, as trade in small batches of artisanal food products is exactly the kind of thing which has suffered. It’s easy for Brexiters to sneer that, like post-Brexit travel barriers to fancy foreign holidays, such things are the complaint of the effete metropolitan elite. But, whatever purveyors of this new politics of envy may imply, it is hardly the case that everyone other than middle-class Londoners holidays, if at all, in Bridlington, and subsists solely on bread and dripping apart from an orange at Christmas. (An orange, you say? You had it lucky!)

The other noteworthy finding of the Aston study is that Brexit has “heavily disrupted and weakened” UK-EU supply chains. This isn’t surprising, and confirms earlier research by, for example, the Resolution Foundation, but, apart from providing valuable new empirical evidence, it is worth highlighting because it strikes at the heart of one of the Brexiters’ many stupidities. Because they thought of the single market as being a kind of trade agreement, potentially replicable by a new trade agreement, they entirely failed to understand its role in integrating supply chains. Obtaining, as the UK did, a (largely) ‘tariff-free’ trade agreement with the EU did little to address this, and now we are living with the consequences.

It’s worth stressing again that, as with the consequences for trade, these are ongoing. As I pointed out when the transition period ended: “what is underway is a fundamental shift in the ‘tectonic plates’ of the UK trading economy and its supply chains, happening in real time and under our noses, but with little comment on the aggregate picture. And it is going to get worse when all the new rules are stringently applied on the EU side and applied at all on the UK side. It is reaching, or will reach, into every niche of economic life …”

What has changed now, of course, is that it is becoming possible to see the aggregate picture, with the Aston study being the latest instalment.

Mutual recognition - again

Press reports of the government’s reaction (£) to the Aston study just repeated the standard mantras about “improving” trade terms with the EU by “tearing down unnecessary barriers”, which doesn’t begin to address the problems. The study’s policy proposals for doing so include regulatory alignment, which seems likely to be consistent with government policy, but rightly recognize that to significantly reduce trade frictions such alignment would need to be accompanied by ‘mutual recognition’ of regulations as between the UK and the EU.

To a degree, that too is consistent with government policy, at least as regards its stated intention to seek mutual recognition of professional qualifications. However, there are significant obstacles even to that, and far more to the extensive use of Mutual Recognition Agreements (MRAs). The EU does enter into some MRAs with third countries, but it was a persistent folly of some of the more ‘sophisticated’ Brexiters to believe that the single market could be extensively replicated by a patchwork of such MRAs, a folly embraced by Theresa May in her March 2018 Mansion House speech when she called for “a comprehensive system of mutual recognition”. However, there was simply no possibility of the EU agreeing to this, as it would effectively end the single market, for reasons set out elegantly and in detail by Professor Stephen Weatherill of Oxford University at the time of May’s speech. That analysis still holds.

It’s true that the Aston proposals are nothing like as unrealistic as Theresa May’s were, in that they refer to a small number of “key sectors”, but, although MRAs in such sectors can’t entirely be ruled out, there is unlikely to be much appetite within the EU to entertain them. Not only would doing so begin to make the EU’s relationship with the UK look rather like that which it regards as complex and cumbersome with Switzerland, it would do so without the UK accepting, as the Swiss do, freedom of movement of people. We’ve been all round these loops before, both before the UK left the EU and afterwards, most recently in November 2022. As the reference to May’s 2018 speech also illustrates, in many ways the UK is still stuck on what in the past I’ve called the Mobius Strip of trying to square the circle of Brexit, by endlessly revisiting solutions to the impossible conundrum of how to be ‘out’ and yet be ‘in’.

The one area where that circle might be squared is that of what seems to be Labour’s ‘flagship’ post-Brexit policy of seeking a Sanitary and Phytosanitary (SPS) regulation deal with the EU. I’ve written about this numerous times but, even there, if the government intends to seek, as at one time the Tories did, an SPS deal based on ‘regulatory equivalence’ then it will not be agreed by the EU. And this is because such a deal would (in effect, even if not in formal terms) be a form of MRA, with both the UK and the EU mutually recognizing each other’s regulations as ‘equivalent’.

If the EU agrees any SPS deal, it will be based on ‘dynamic alignment’ with ECJ jurisdiction and, in that de-limited sense is often described as a ‘Swiss-style’ agreement. It could also be described as, within the SPS domain, the UK being ‘in’ whilst in all other respects being ‘out’. But this would be an exceptional deal, conceivable because it has in the past been offered by the EU (and rejected by Johnson’s government as violating UK sovereignty), and not a template for other sectoral carve-outs.

Regulatory alignment of product standards

An SPS deal may be one of the main ways that the government will seek to accommodate Brexit, but some of the issues wrapped up in those of regulatory alignment and mutual recognition surface in other policy developments.

A key example is the Product Regulation and Metrology Bill (PRMB). I’ve mentioned this Bill a couple of times since it was unveiled in the King’s Speech, referring to it in terms of providing the legal basis for the UK to continue to follow EU safety regulations and, as such, being an important indication of the government’s commitment to regulatory alignment. What I failed to spot, but was alerted to by Nigel Haigh of the Institute of Environmental Policy UK, is that whereas in the King’s Speech the Bill was indeed entitled the Product Safety and Metrology Bill, in its published form the word ‘safety’ was replaced with ‘regulation’, and that betokens a much wider ambit. Just how much wider remains to be seen, but one important clause in the Bill refers to potentially tracking EU regulations relating to the environmental impact of products.

No matter how wide its ambit turns out to be, this doesn’t amount to ‘dynamic alignment’ with EU product regulations, in that, whilst creating an easy mechanism for the UK to follow such regulations as they change in the future, it does not create any commitment automatically to do so. In this sense, despite Brexiters’ horrified reactions to the Bill, it does not actually violate sovereignty, even in their highly restricted meaning of the term. However, it does at least imply a commitment to ongoing regulatory alignment as the norm rather than the exception.

To the extent that this implication is realized in practice it will have the effect, amongst other things, of somewhat mitigating the costs of Brexit, since it means that businesses only need to produce to a single standard whether selling in the UK or the EU. To a degree, that may not make much difference. We’ve already seen, most famously with ‘tethered plastic bottle tops’, that firms sometimes choose to follow EU product standards even without any corresponding change in UK law, so as to avoid the costs of dual production lines. However, the PRMB should mean that businesses, when selling to the EU, are relieved of much of the burden of having to establish for themselves what EU regulations they need to conform to, since this would be done by the government. It also prevents firms, whether in the UK or overseas, from ‘dumping’ what might be considered sub-standard products on the UK market. It should also serve to ‘thin’ the Irish Sea Border, to the extent that it reduces the possibility of passive divergence between product standards in Great Britain and Northern Ireland.

Nevertheless, it can’t be emphasized often enough that simply having the same regulatory standards as the EU, to the extent that the PRMB will deliver that within some regulatory domains, whilst reducing some of the costs and inconveniences of having left the single market, in no way provides the benefits of single market membership. Alignment is not access (£): the PRMB still means that we are ‘out’ and not ‘in’. To put it another way, there is no ‘mutual recognition’ in any of this, which is the flipside of it being something that the UK can do unilaterally, without the need for any agreement with the EU. The fact that the UK may choose to align with EU regulations does not make those regulations ‘recognized’ by the EU. What it does show is that the UK recognizes (in a different sense of the word) the pragmatic benefits of having regulations which are aligned with those of the EU.

So whilst the PRMB does not in fact violate the Brexiters’ idea of sovereignty – the UK is making its own laws – it does show just how facile that idea is. For what it really demonstrates is that the practical realities of the UK’s economic proximity to the EU mean that regulatory alignment is still its best option, despite Brexit, whilst massively reducing its benefits, because of Brexit. The UK may, in the Brexiters’ terms, have regained sovereignty, and paid the price for doing so, but it can’t afford to use it. The PRMB is simply a (limited) acknowledgment of this reality, and an attempt to accommodate to it by ‘making the best of a bad job’*.

‘Not for EU’ labels

Some of these issues appear in a different way in one of the most abstruse of Brexit topics, that of ‘Not for EU” (NFEU) labelling. As I discussed in a detailed post last October, NFEU labels are, in part, a particular illustration of the difference between alignment and access. They don’t necessarily mean, as many mistakenly believe, that the product they are attached to does not conform to EU standards, but rather that, whether or not they do so, they are not certified for sale in the EU single market.

Without re-hashing that long and complicated post, the labels arise as part of the Windsor Framework as a requirement for certain goods produced in Great Britain (GB) but sold in Northern Ireland (NI), preventing them being legally sold in (the Republic of) Ireland (or, of course, anywhere in the EU, but it is primarily aimed at the possibility of them entering Ireland). The decision to extend their use to GB was an entirely unilateral one taken by the UK government, largely as a sop to NI unionists as it assuaged their concerns about NI being treated differently to the rest of the UK. In a way, this could be regarded as yet another way of acting as if Brexit hadn’t really happened, in the particular sense of trying to act as if the Irish Sea Border Brexit has given rise to didn’t really exist. 

NFEU labels were due to become a legal requirement in GB at the beginning of October for meat and dairy products (fish, fruit and vegetables were set to follow next July), although many firms began to introduce them in advance of the deadline. However, at almost the last minute, the new government announced this month that the requirement has been indefinitely postponed, with a review to be undertaken. To avoid any misunderstanding: this does not mean the end of NFEU labels in NI, where they have been required since last October and will continue to be used, because doing so is part of the Windsor Framework agreed with the EU. Rather, it is the UK’s unilateral decision to extend to their use in GB which has been reversed.

But not for GB

At one level, it’s yet another example of the mess and chaos which Brexit has brought in its train, and especially of the consequences not just of the UK leaving the EU single market but of the way that Brexit has fractured the UK single market. It is also, of course, an eruption of the consequences of the insoluble ‘Northern Ireland Trilemma’. But it is particularly fascinating because the business economics of NFEU labels point in contradictory directions.

For some firms, in some respects, it is quite desirable for NFEU to apply in GB, given that it applies in the NI. If they are selling in both territories then it reduces costs, as it avoids having to have different labels, and increases flexibility, as it allows stock to be distributed to wherever in the UK it is needed. This would be the case for those supermarket chains which extend across the UK, for example, and, indeed, there was some business lobbying of government to introduce the GB policy. It also explains why some chains began to implement the policy before it was legally required.

Against that, however, is the fact that mistaken as it is, the impression that the goods marked NFEU are sub-standard may deter some consumers from purchasing them. I suppose they might be offset by fanatically pro-Brexit consumers, who read the label as denoting some special Brexity product, denied to envious continentals, but it is surely hard to imagine them to be very numerous. Meanwhile, for firms which only sell in GB, including chains which have no presence in NI, there is no upside to NFEU, only downside. Hence there has also been business lobbying to abandon the GB policy.

It's probably sensible to have postponed, and very likely to have halted, NFEU labels for GB, but doing so will inevitably provoke unionist grievance in NI. And, as with the postponement of UKCA marking, it is another case where those firms which incurred costs to comply in advance of the now abandoned deadlines have wasted money. That may not amount to much in the overall scheme of Brexit costs, but it’s yet another example of how those costs just keep mounting, and how even modest attempts to reduce them are not, themselves, cost-free.

The bigger picture

One of the difficulties of analysing Brexit is that it is hard (and, for any one individual, I would say it is impossible), to grasp it in its totality. That is mainly because of its scale and the technical complexity of each of its elements, but also because of the ways in which those elements interact and interlink with each other.

For example, in relation to this post, the need for NFEU labeling would disappear if there were to be an SPS agreement, and I assume that this is what the government hopes will ultimately be its fate. By extension, this is one reason why the EU is likely to be amenable to an SPS agreement. For the original offer of one was made in the context of the then ongoing row about the Northern Ireland Protocol and it arose because the EU has a strategic and principled interest in ameliorating the problem Brexit created for Ireland, as was demonstrated from the very first days after the referendum result. It is unclear that this interest exists in relation to any other regulatory area.

There is also a potential interrelationship with the PRMB, because although we don’t yet know its full ambit, we do know the areas it will exclude, as they are listed in a schedule at the end of the Bill. For the most part, they are things like food, plants, and products or by-products of animal origin: in short, the kinds of products that SPS regulations relate to, and, moreover, listed with reference to their definitions in EU law. No reason is given for their exclusion so this is pure, very possibly stupid, speculation on my part, but I wonder if it is because the government anticipates an SPS deal with the EU which would entail standards for these products being dynamically aligned with the EUs and, as such, treated separately from all other product standards?

Whether or not that is the case, the wider point is that with which I began, and which I’ve written about in the last couple of posts: the government’s lack of a post-Brexit strategy. For the implication of the interlinked nature of Brexit issues is that they are not really amenable to piece-by-piece attempts to accommodate to being out of the EU. Whilst that strategic absence persists, there will still be plenty of Brexit news to discuss but it won’t add up to a coherent picture and, in the absence of that, many of the old debates will continue.

This is the first post of the ninth year I have been writing this blog. There’s still little sign Britain has accommodated itself to Brexit, or even has any idea of how to do so.

 

*A more extensive acknowledgement of this reality could lead, even within Labour’s red lines, to a new post-Brexit settlement along the lines of the Ukraine model. If it is objected (let’s go round the loop again) that this would make the UK a rule-taker, then it would show a failure to recognize that, as things stand, the UK is already a de facto rule-taker, but with few of the benefits.

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.

A country on hold

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

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

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

No news is bad news

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

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

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

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

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

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

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

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

Waiting for god knows what

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

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

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

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

Labour in power?

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

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

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

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

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

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

The death row government

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

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

Britain is slowly learning what Brexit means

Shortly after last week’s post about Brexit, Russia, and defence went up, the news of Alexei Navalny’s death was announced, and although its cause is still shrouded in secrecy it can hardly be regarded as an accident, if only because of the brutal regime obtaining at the ‘Polar Wolf’ penal colony where he was incarcerated. It was a further reminder of the nature of Putin’s regime, and the anniversary, tomorrow, of its unprovoked attack on Ukraine will provide another. That is even without considering the crazy threats last weekend from Russia’s former President and Putin ally Dmitry Medvedev that Washington, London, Berlin, and Kyiv would be obliterated by nuclear missiles if his country was forced out of Ukraine.

As I argued in that post, the combination of the Putin threat and a possible Trump Presidency is provoking renewed debate about, and possible progress towards, closer defence and security integration between the UK and the EU. It is telling that, just as I was writing it, the German Finance Minister even floated the idea of closer Anglo-French nuclear weapons cooperation, with financial support from EU countries, so as to develop a European capability (not that this week’s events have been much of an advert for Britain’s nuclear prowess). Shortly afterwards, that idea was alluded to by a close ally of Emmanuel Macron, on a visit to London to discuss the UK’s possible role in European defence more generally.

Nuclear defence integration isn’t in prospect, but that it is even being discussed is an indication of the seriousness of the situation, and the integrative logic of that situation. That logic was certainly on display last weekend at the annual meeting of the annual Munich Security Conference, which brought perhaps the strongest statement yet from Shadow Foreign Secretary David Lammy that a Labour government would seek a deep security and defence pact with the EU. At the same time, Valérie Hayer, who leads the Renew Group, the third largest bloc within the European Parliament, indicated strong support for a new defence treaty with the UK.

School for scoundrels

If growing threats are once more teaching the perils of isolation, passing the test will not be easy. Even without Brexit, a defence agreement would have been difficult and Brexit has made it harder. Hayer referred to such an agreement as having been spoken of in Theresa May’s time. That’s true, but it has a convoluted history, which remains important. When May submitted the letter triggering Article 50 in March 2017, there was a strong implication, much resented within the EU, that the UK would use its security and military capabilities as a bargaining tool in the exit negotiations. It’s worth recalling this partly because there is a tendency as time has gone by to depict May as (according to taste) the reasonable and pragmatic face of Brexit or, as Brexit Ultras would have it, unwilling to play ‘hardball’ with the EU.

In fact, apart from security, it was May and the then Chancellor Philip Hammond who threatened the EU with an ‘alternative economic model’ of aggressive tax cuts and deregulation if the UK did not get the kind of trade deal it wanted. Recalling this isn’t just a matter of setting the domestic record straight. It is directly relevant to the present because, although UK-EU relations are now generally better than they have been, there is still a legacy of distrust to be overcome which is not solely connected to how Boris Johnson conducted himself. Having never exactly been an easy partner even before the referendum, Britain came very close to making itself a pariah state in the years after 2016 and the memory of that, along with the spectacle of so many Tory MPs and their allies still obsessively demanding a cleaner break with the EU, as well as derogation from the ECHR, means that creating a new relationship of deep trust will not be easy.

May became considerably less antagonistic in tone in her September 2017 Florence Speech, to the extent that ironically, as I observed at the time, it sounded more like an explanation of why the UK should be joining the EU rather than of why it was leaving. As regards security, specifically, she was also notably diplomatic in her own speech to the Munich Security Conference, in 2018, although as I discussed then it continued to have some ambiguities. (By contrast, Boris Johnson, as Foreign Secretary, had used his appearance at the conference, the year before, to raise hackles by gloating about Britain’s “liberation” from the EU.)

However it was the Russian nerve poison attacks on Salisbury, just a couple of weeks after May’s Munich speech, which really brought home – literally – the fact that the UK needed European allies. That provided the background to the possibility of a deep security and defence pact that Hayer referred to, which was envisaged by the Political Declaration that accompanied May’s Withdrawal Agreement. But once Johnson came to power, he and David Frost proceeded to question its parameters and once again it was suggested, including by Nick Timothy, May’s one-time adviser who had been a key architect of hard Brexit (and, reportedly, had had an input into the Article 50 letter ‘threats’), that security and defence could be used as “leverage” to gain concessions on trade.

It’s not clear that any such concessions were achieved and, at all events, what emerged in the Trade and Cooperation Agreement was, as regards security, a “dialled down” relationship and, as regards foreign and defence policy, no agreement at all. It was really only the Russian invasion of Ukraine in 2022 which created an impetus to greater cooperation, but “the relationship remains unstructured”. As I argued last week, the continuing threat of Russia, plus the threat, and, if it happens, the fact, of a Trump Presidency – along with the advent of a Labour government – may well be a catalyst for a closer and more structured relationship. Certainly some Brexiters have become alive to that possibility, with the Telegraph’s Ambrose Evans-Pritchard (£) counselling that “if you want to keep Brexit, pray for a Biden victory” and a Spectator article warning (£) against attempts to ‘lock’ Britain into defence integration with the EU. It’s a reminder that however compelling the logic of cooperation, it will encounter opposition from the stubbornly unteachable, which in turn will undermine trust in the UK’s reliability.

Learning the facts of life  

Yet the logic is compelling, and exerts a remorseless pressure. The fundamental point concerns the interconnectedness of the UK and the EU, which didn’t cease to exist because of Brexit. It is an interconnectedness which takes numerous forms, certainly not just in relation to security and defence, but trade, supply chains, culture, education, science, and families. Some of that is to do with the simple fact of being in geographical proximity; some of it is because of the fact of the UK having been a member of the EU, or its predecessors, for almost fifty years, leaving a deep legacy of integration. Brexiters gave no thought to the implications of any of this, and seemed to imagine that many of the conveniences of membership would just carry on as before, despite leaving, whilst relationships with the rest of the world outside the EU, and perhaps even the social mores and values of life before the EEC, could just be picked up as if they had been pickled in aspic since 1973.

The consequence is that Britain is now a learner in the world that it created for itself with Brexit, and a very slow learner at that. The lessons of interconnected defence are being taught the most quickly because the Russian invasion of Ukraine was such a seismic event that even the dullest of pupils couldn’t ignore it. Similarly, galvanized by his self-imposed political imperative to ‘stop the boats’, Rishi Sunak is about to agree a deal, possibly to be signed today, to share information with Frontex, the EU’s border protection agency. It turns out that international irregular migration flows can’t be dealt with at national level, something underscored just yesterday by the news that Europol have dismantled a major gang involved in cross-channel people-smuggling. Who knew?

The same tutorials are being given in other domains. Reality just keeps intruding on Brexiter fantasies. Thus, despite some die-hard Brexiter bumptiousness, it has become obvious from impartial analysis that ‘doing our own trade deals’ is not just of virtually no economic value but is a lot more complicated than the early ‘sign up to anything’ approach that led to the agreements with Australia and New Zealand. At all events, UK trade remains strongly connected to the EU. The lessons about the interconnected nature of regulation are also gradually being learnt. Sometimes, as with the effective abandonment of the UKCA mark, it happens through the laborious process of trial and error. Sometimes, as with this week’s news that UK officials are lobbying the EU to tighten its financial services regulation, it happens through the belated realization that what the EU does actually has a huge effect on Britain and, in this particular case, that robust regulation serves a useful purpose. Once again, who knew?

Cookery lessons

A currently widely-reported example of these dawning realities is Rishi Sunak’s sudden attention to food security, and his newfound interest in farming generally. Much of that interest is no doubt motivated by widespread reports that Tory support in its rural English heartlands is imploding, many of the roots of which lie in Brexit, in (at least) four ways.

First, there is the issue of the increased barriers to trading with the EU, which have added substantial costs to UK food exports, with more costs to come with the introduction of full import controls this year. Second there is the adverse impact on farmers of the new post-Brexit trade deals. Third, there is the impact of freedom of movement of labour having ended. And, fourth, there is the continuing saga of the replacement for the EU’s Common Agricultural Policy (CAP) system of payments and support. Clearly all of these are inter-related, as the problems faced by farmers reduce UK production, thus aggravating food insecurity (something also brought into focus by the Ukraine war), and, alongside the increased costs of trade with the EU, this contributes to food price inflation and supply disruptions for consumers.

The replacement of CAP is a particularly sorry story. Here is something which was the bête noire of British Eurosceptics since the 1970s and so the one area, above all, for which they should have been prepared for when they finally achieved Brexit. Instead, the introduction of the confusing Environmental Land Management Scheme (ELMS) was botched and chaotic, leading to endless reviews and delays, changes, and much of the promised financial support has never materialized. Even by Brexit standards it is a convoluted story, but the basic fact is that there is still no fully-functioning replacement for the CAP, or even any strategic clarity about whether the aim is to incentivize food production or countryside stewardship.

Computer club

If farming and food security is a case study in post-Brexit Britain’s slow schooling in reality, it also provides illustrations of one of the most significant, if least discussed, aspects of the theme of interconnectedness. A recent article by TC Callis in Kent and Surrey Bylines, discussing the introduction of import controls, drew attention, amongst other things, to how Brexit deprived the UK of access to relevant EU databases. It is a point I have stressed repeatedly in the past, but one which rarely features in media coverage of the issue. Indeed, even now, reports of the dangers of food crime under plans to shift testing facilities from Dover to inland Sevington ignore this issue. But Callis explains how food crime and other risks have been exacerbated by loss of full access to the EU’s Rapid Alert System for Food and Feed (RASFF) and, as I’ve pointed out before (although I failed to mention RASFF), there is a whole ecosystem of databases in this sphere, including the EU’s Animal Disease Information System (ADIS) and Trade Control Expert System (TRACES), to which the UK no longer has full access.

Such issues of data-sharing are part of the crucial, if unglamorous, infrastructure which, along with much regulatory infrastructure, keeps daily life going. A litter of acronyms, they are like the hardware and software of the computers we all use but which few people know or care about so long as they work. In the economic sphere, it is lack of access to the EU REACH database that has meant the UK having to develop a separate system, increasing costs in the chemicals industry*, and the Carbon Border Adjustment Mechanism (CBAM) is set to be another (as discussed in previous posts). In both these cases, linkage of the UK and EU databases may well be the ultimate outcome, underlining both the pointlessness of duplication as well as the persistent logic of integration and interconnectedness  

In the policing and criminal justice sphere, as with food and diseases, there is a complex EU eco-system of which the UK is no longer a part even though, of course, crime and other security threats to the UK are not confined to national borders. So we remain connected to Europe as regards these threats, but at best semi-connected as regards the means of meeting them. Thus some cooperation, albeit on reduced terms, continues, for example with EUROPOL and EUROJUST, but the UK has lost access to the Schengen Information System II (SIS II) and the European Criminal Records Information System (ECRIS), significantly undermining policing.

Notably, it is database access which is central to the deal, mentioned above, that Sunak is doing with the EU over cooperation with Frontex, notably the European Border Surveillance System (EUROSUR). However that has another implication, which also applies to those EU security databases - like DNA, criminal records, fingerprints and air passenger lists – to which the UK has already negotiated post-Brexit access: it makes it highly unlikely that the UK could abandon the data protection standards of GDPR**. So, in this sense, interconnectedness in one domain begets interconnectedness in others.

Messy work

What we are seeing across all these areas, and many others, is therefore a very complex and untidy picture, which is almost impossible to summarise, or to characterize in any one way. It consists of a series of ad hoc accommodations, sometimes entailing duplication (e.g. UK REACH), sometimes entailing piecemeal deals with the EU (e.g. EUROSUR), sometimes simply meaning loss of functionality or capacity (e.g. SIS II). It should not be forgotten that all of these accommodations come at a financial cost, fragmented in ways which make it impossible to quantify, all of which used to be rolled into the UK’s budgetary contribution to the EU, in return for which we used to have full access to everything rather than to a jumble of patches.

To add to the complexity, almost none of these issues are static, with new systems – whether they be data management systems, regulatory systems, or sector-specific systems like farming support – being rolled out, each with varying transition or implementation periods. Likewise, to the extent that these developments involve recalibrations and redefinitions in particular aspects of the UK-EU relationship, they are also evolutionary rather than static. It is obviously also the case that the pace and scale of change in any particular area varies according to economic or political exigency, which is why the case of defence has a particular momentum just now, but they are all in flux to some degree or another.

But for all that the overall picture is messy and hard to characterize, in almost all cases the direction of travel is the same in pointing to integration. The well-documented tendency to non-divergence in regulation is an aspect of that, but non-divergence really only codes continuation of existing integration. The wider picture is one of closening relationships with the EU, either in the sense of reversing some of the distances initially created by Brexit (e.g. the Frontex deal or, not discussed in this post, rejoining Horizon), even if in clumsy or sub-optimal ways, or in the sense of moving to a greater degree of integration than existed even as an EU member (defence being potentially by far the most important example). For Brexiters, all this betokens the failure to ‘do Brexit properly’, but what it really shows is the failure of Brexit as a concept, or at least as a realistic policy.

A slow and unwilling pupil

There have been many faces of Brexit over the years. The gurning anger of Farage. The blustering buffoonery of Johnson. The psychotic glitter of Braverman. The vapid pipsqueakery of Grimes. The blokeish thuggery of Banks. The creepy unctuousness of Gove. The mad narcissism of Cummings. The born-again zealotry of Truss. The porcine truculence of Frost. The smug spitefulness of Rees-Mogg.

They all still exist, but the dominant image, now, is that of a lumpen, sulky, schoolboy dullard. Kept in for an umpteenth detention, tongue-between-teeth, he ponderously repeats the basic textbook exercises that his juniors mastered long ago, and with painful slowness comes to realize that the things his teachers had been trying to drum in to him for years past are, indeed, true.

 

*Some of these costs have been reduced by recent government changes to the UK REACH system, although, as is typically the case with regulation, this involves trade-offs in terms of creating higher levels of risk.

**Were the UK to do so, the EU would almost certainly withdraw recognition of the UK data protection system, and that would have the effect of locking us out of those EU databases to which we still have full access, as well as having profoundly damaging consequences for the commercial use of data. It remains an open question whether the measures in the current UK Data Protection and Digital Information Bill will constitute sufficient divergence from EU GDPR to lead the EU to revoke its 2021 adequacy decision about the UK regime.