Brexit has embedded dishonesty in British politics

There has been relatively little Brexit news over the last week or so, and perhaps the most significant was Mayor of London Sadiq Khan’s high-profile Mansion House speech, in which he said “it is now obvious that Brexit isn’t working”. Drawing on research undertaken by Cambridge Econometrics, Khan stated that the UK economy as a whole is £140 billion, or 6%, smaller than it would have been without Brexit, of which £30 billion was foregone growth in London. According to the same research, by 2035, the value of goods and services produced in London will be 7.5% lower than it would have been without Brexit, and 10.1% lower for the UK as a whole, whilst investment for the UK will be a staggering 32.4% lower than it would have been.

The speech was significant for two reasons. The first is political. Khan just about stayed within the parameters of current Labour policy by calling for a “closer relationship” with the EU, but in suggesting the need for a “more honest and mature discussion” about the negative impact, and about the benefits of rejoining the single market, he strayed further beyond it than any other senior Labour politician. That won’t have any immediate impact – the politics of remain-supporting London are different from those facing Labour nationally – and Starmer’s current stance is arguably (in my view) defensible and unarguably here to stay for the foreseeable future*. But it is slender candle in the wind, which might kindle a greater flame in the future.

The second significance is the Cambridge Econometrics study itself. Inevitably, Brexiters were quick to try to rubbish it, such as in a ‘Briefings for Britain’ article (curiously, written in the first person but credited to Briefings for Britain collectively, so we’ll never be able to assess the author’s credentials). But the fact remains that there are now at least four major counterfactual estimates, from the CER, the NIESR, the OBR and, now, Cambridge Econometrics which all show that Brexit has been damaging, albeit with a range from GDP (or in the latter case GVA) being 4% lower than it would have been to 10% lower by 2035. Each comes from a credible source, each is independent, each uses a different modelling or calculating technique, and all show a negative impact. Yet, mysteriously, all of them are wrong according to the that small group of avowedly pro-Brexit economists who, as I’ve discussed before, persist in ignoring the counterfactual question in favour of various largely bogus comparisons with the EU, or the Eurozone, or individual EU countries.

Brexiter sophistry

It is especially hard to take this group seriously when one of its most active members tweets approvingly things like this week’s Express report of a “Brexit victory” because a West Midlands firm has won some new export orders. Good news, no doubt, but there’s nothing to suggest it has anything to do with Brexit. To the extent that such empty puff-pieces have any meaning at all, it is that they grow out of one of the most disingenuous rhetorical strategies of the Brexiters. One of the ways they dismissed warnings of the damage Brexit would do as ‘Project Fear’ was to create a flawed reductio ad absurdum, so that, say, warnings of reduced investment or reduced trade with the EU were rendered as claims that all investment or all trade with the EU would cease; or claims about the EU as a peace project were rendered as claims that leaving the EU would cause World War Three to break out.

Hence, now, as with the Express report of a new investment and export contract, any piece of good news can be misrepresented as discrediting the mispresented false claim that Brexit would mean no new investment or export contract. It is doubly dishonest since it also posits as the test of Brexit not whether it has had the positive effect that Brexiters promised, but whether it has not had a negative effect.

Similar sophistry greets the release of any and every report about Brexit. Thus, this week a report in the Telegraph (£), of all places, highlighted the impact of Brexit in eroding the global standing of the London stock market. Within it, quite reasonably and correctly, there was discussion of the way that Brexit is not the only factor. But, immediately, that got taken up by pro-Brexit social media accounts to show that claims it was all down to Brexit were false, even though no such claims had been made. And, again, all the Brexiter reaction was about attempts to downplay any Brexit damage rather than to argue that, in fact, Brexit had benefitted the stock market, as if the Brexiters had sold their project with the promise ‘it won’t be too bad’.

Brexiter failure to take responsibility

This failure to take responsibility for their failed project is now endemic. The latest trade figures show that the percentage of UK trade done with the EU is now higher than before the referendum, at about 53.3%. Cue for many to declare that this showed Project Fear disproven and Brexit justified once again (see, for example, many of the responses to this Tweet). But it means nothing of the sort. The explanation is that growth in trade with non-EU countries has been weaker than with the EU. This is the exact opposite of the central Brexiter proposition about trade, which is that the EU has a declining share of world economic growth and so, ‘unshackled from the corpse’ of the ‘EU protectionist racket’, the UK would re-orientate towards the fast-growing areas of the world.

That this has failed to materialize isn’t because the UK has not (or not yet) developed many major new free trade agreements, for example with the US or India. We shouldn’t by the way, let the Brexiters off the hook by saying ‘not yet’, given that David Davis, when Brexit Secretary, claimed “it will be possible to secure bilateral trade deals with the rest of the world that are larger than the value of the EU single market within two years”. But, timing aside, such deals just don’t, and can’t, make a massive difference: CPTPP membership is expected to lead to a 0.04% increase in GDP over 15 years, the Australia and New Zealand deals together 0.1%, and a deal with the US perhaps 0.16%.

In fact, the reason the Brexiter proposition has failed to materialize is because it was always a fallacy, for multiple reasons. Global economic development in previous decades has of course meant that in percentage terms the EU accounts for a declining share of world economic activity, but that doesn’t mean it is declining in absolute terms. Nor do fast growth rates in other countries mean that, even if their international trade grows at the same rate, the absolute value of increased trade with the UK necessarily grows very much (i.e. because it starts from a small base). And, in any case, whilst being in the EU assists trade with the rest of the EU, it does not preclude trading outside the EU.

Meanwhile, the basic observation of ‘trade gravity’ – that geographical proximity is a major weighting factor on where trade occurs, something denied by the Brexiter idea of ‘post-geography trading world’ – remains well-evidenced (this also makes Brexiter glee about the poor economic performance of e.g. Germany misplaced: whether in the EU or not it is bad news for the UK if its trading partners are in trouble). Indeed, that is borne out by these latest figures.

In fact, it looks likely that the impact of the pandemic, Ukraine and, now, attacks on shipping in the Red Sea are leading to a general trend to shorten supply chains and, therefore, to make regional economic relationships more important. The Brexiters can’t be blamed for not anticipating those events, but they can be blamed for making a major strategic error in not appreciating the economic and geo-political significance of regionalization. For that is not the wisdom of hindsight: it is exactly what I spelt out in detail in a post of January 2019 – before we left the EU, before the pandemic, before the Ukraine war, before the Houthi attacks on Red Sea shipping. It’s not, as the Brexiters have it, that these kinds of events, rather than Brexit, are what have caused all our recent economic woes. It is that, on the one hand, unlike other countries, the UK has added Brexit to the list of negatives and, on the other hand, that such events illustrate the fundamental strategic flaw within Brexit.

It's worth saying that, assuming the UK starts to introduce full import controls on EU goods at the end of this month, we will see a new iteration of all these debates. Firstly, one consequence is likely to be that the figure of 53.3% for the share of UK trade done with the EU will fall a bit. That is because – to spell it out once again – increasing trade frictions will tend to make trade growth lower than it otherwise would have been. However, it won’t mean that the Brexiter ‘post-geography’ thesis is becoming vindicated. It will just mean that the relative gap between the rates of UK-EU and UK-ROW trade growth will have shifted. Secondly, using the same old trick as they did with Covid and Ukraine, we can expect the Brexiters to use the impact of the Houthi attacks to explain away the impact of import controls.

Brexiter lack of contrition

Of course, trade wasn’t the only way that Brexit was supposed to be beneficial. Domestically, it was supposed to see a re-balancing of the UK economy away from London, and away from financial services, both in itself and as the spur to the ‘levelling-up’ agenda. That was partly predicated on the anti-London sentiment that continues to define populist politics, but it was also a recognition of legitimate grievances about regional inequality and about the consequences of decisions, many taken by the Thatcher governments, to prioritise services, and especially financial services, as the key to future national prosperity. This re-balancing was supposed to mean that, whilst financial services would benefit from Brexit by being freed from EU bureaucracy, other sectors would benefit even more.

From that point of view, Brexit has also been an abject failure. The Cambridge Econometrics report was, understandably given its context, reported mainly in terms of what Brexit means for London. But, in the process, it revealed that, whilst damaged by Brexit, London is proportionately less damaged than the rest of the country, thus actually exacerbating capital-regional inequalities. That is mainly because, indeed, London has a more services-intensive economy, and international trade in services has been less affected than goods trade by Brexit.

So although, as the Telegraph report, and another this week, from recruiters Morgan McKinley estimating that there are 79% fewer newly open jobs in banking in London since the referendum, suggest that financial services have been damaged (and there’s plenty of other evidence to support this), this isn’t offset by any benefit for other sectors which, on the contrary, are as badly or even worse affected. Again it’s the opposite of what Brexiters promised. Again, the Brexiters were warned of this. And, again, it’s no defence for them to say that some of the warnings were for even worse outcomes than have so far transpired.

This also applies to non-economic issues and, of these, perhaps none more so than Northern Ireland and the politics of the peace process. Here, the warnings were clear, and made by senior politicians with direct and deep experience, most obviously John Major and Tony Blair, but they were shrugged off dismissively by Brexiters, including DUP Brexiters who called the warnings irresponsible scaremongering. Exactly how Brexit was going to play out for Northern Ireland couldn’t be said with certainty until the exact form Brexit took was known (and, to an extent, it still can’t be said with certainty). But that it would be de-stabilizing in some way or another was inevitable, if only because the fact that both Ireland and the UK were members of the EU enabled a crucial de-dramatization or blurring of issues of identity, identification, and allegiance.

As things have turned out, what it has meant in particular is the creation of an economic border between Great Britain and Northern Ireland, with all that means, at least symbolically, for the unionist community. That Brexit, and hard Brexit at that, was and is supported by unionist political leaders doesn’t negate that. And all communities of Northern Ireland are severely affected by the ongoing collapse of the power-sharing institutions and its consequences, of which this week’s mass public sector strike is one of the most serious examples.

For none of this is there the tiniest sign of contrition from any leading Brexiter, or even any admission of responsibility. On the contrary, their only response is to talk of Brexit having been ‘botched’, ‘betrayed’, or ‘not done properly’, even in those cases where they actually voted – as MPs or MEPs – for precisely the form of Brexit that we have.

The wreck of the Brexit government

Alongside all this lies the now hideous spectacle of the Tory government tearing itself apart, on clear display this week in its battle over whether to pass the disgusting and stupid Rwanda Bill in Rishi Sunak’s preferred form, or whether to add some even more disgusting and stupid clauses. At stake, here, is the bigger battle of the ‘Five Families’ or ‘Brexitists’ to slough off the last, moth-eaten, remnants of ‘traditional’ Conservatism. Or, to put it another way, the battle between those who would prefer to think, or at least prefer others to think, that they are not ‘the nasty party’ with those who are more than happy to be just that, and perhaps even think it a badge of honour.

That battle for the meaning of ‘real conservatism’ is, as I’ve argued many times before, inseparable from Brexit and, indeed, those castigating the party for not being ‘real conservatives’ are a perfect overlap with those who decry Brexit for not being ‘real Brexit’, just as there are parallels between Sunak’s plight now and Theresa May’s. I had thought that this battle would not be fully fought until after a general election loss, but it seems as if some within the ‘Five Families’ may be too impatient to wait, or perhaps that, as they pitched it this week (£), the impending loss of the election is what motivates them.

If so, it seems unlikely that they will be satisfied with anything Sunak may do in policy terms – fundamentally, they don’t think he is a real Conservative or a real Brexiter – and yet some, such as Jacob Rees-Mogg (£), seem to have recognized that ditching yet another leader before the election would be too ludicrous to contemplate. Certainly the tide went out on the Rwanda Bill rebellion, with only eleven Tory MPs – dubbed the ‘New Spartans’ by oddball ex-MEP David Bannerman – voting against the government. One rather amusing side-story was the beaching Lee ‘prolier than thou’ Anderson, who resigned as Deputy Chairman so as to be free to rebel, but then pulled out of voting against the government because some Labour MPs laughed at him (and perhaps because he could see how few were going to join him). The Brexitists aren’t yet ready, or able, to go in for the kill.

However, others, like Andrea ‘up yours’ Jenkyns, clearly think otherwise, and it can’t altogether be discounted that a new leader, calling a snap election, might not be able to snatch an unlikely victory. For one thing, there is a kind of febrile desperation in the air in Britain today, so that, faced with a choice between the uninspiringly cautious Keir Starmer and some novel, perhaps charismatic, Tory candidate, the electorate might just opt for the latter. For another thing, it wouldn’t be the first time such sudden surges in popularity have happened – remember Cleggmania? Quite who this charismatic Tory might be, I don’t know, but, after all, such things are in the eye of the beholder. Of course, it is equally possible that the Brexitists just don’t care about electability, and, as with political extremists of all sorts, ‘purity’ matters to them more than power. In a sense, we must hope that is true.

Crippled by dishonesty

If there is a guiding theme in this week’s post, it is how mired in dishonesty British politics has become. As with Britain’s economic problems, that dishonesty isn’t solely the result of Brexit but Brexit created a tipping point, embedding dishonesty to an extent from which it seems almost impossible to recover. Yesterday’s rebuke to the government from the UK Statistics Authority for its misleading use of asylum figures is just the latest example, along with the now almost routine ‘context additions’ (aka factual discredits) placed on posts on X from Sunak, or other government ministers, or government departments, or the Conservative Party. The lies and, at best, half-truths, just pour out daily.

This makes Sadiq Khan’s call for honesty both remarkable and marginal. We can’t, collectively, talk honestly about the most fundamental change made to our country’s entire economic and geo-political strategy. Indeed, we can scarcely talk about it at all. That can be blamed on the timidity of politicians, especially Labour politicians like Starmer who opposed Brexit, and surely know, quite as well as any of us, how damaging Brexit is yet are not able to say so openly. But, more fundamentally, it is the fault of the Brexiters, in both politics and the media, who have made honest discussion so difficult and toxic as to be impossible.

In doing that, they have ironically undermined Brexit itself. A habitual taunt aimed at ‘remainers’ is that they don’t trust their own country to run itself. But running our own affairs must mean, at a minimum, that the reality of those affairs can be openly and honestly discussed. Yet, with Britain having become, in their terms, an independent country, the Brexiters have created a situation where such discussion is impossible. I think the idea that EU membership means the EU running our country was and is utterly fatuous, but, looking at the terms under which the Brexiters have ensured we ‘run ourselves’ since leaving, it might be better if it did.

 

*I don’t think that point is affected by Rachel Reeves’ mention of the negative impact of Brexit this week which, although of note, seemed more aimed at the political chaos around the UK’s departure from the EU rather than at Brexit itself.

Update (23/01.24 at 10.54): Since writing this post, the article on the Briefings for Brexit website criticising Sadiq Khan and the Cambridge Econometrics study, which originally did not identify its author, has now done so. It is Robert Colville.

Brexit: the next six years

We’re now six years on from the referendum, but I’m not going to do an ‘anniversary round-up post’ because I did that in April, to mark six years since the campaign got underway. That post was entitled ‘six years of failure’, and most of it still applies, although the saga of the Northern Ireland Protocol (NIP) has moved on with the publication of the Northern Ireland Protocol Bill (NIPB), as analysed last week.

The second reading of the Bill will be on Monday, although the DUP are still refusing to take part in the power-sharing institutions*. Meanwhile, the President of the EU Commission has issued a clear statement that it will discuss implementation issues but not re-write the Protocol, and its member states have unanimously backed the Commission both in this stance and in taking legal action against the UK. It is desperately sad, but alas no surprise, to see a senior Dutch journalist, Caroline de Gruyter, drawing direct comparisons between the UK and Russia.

Brexit has failed, but what should be done about it?

There will be much more to follow on that, and of course the NIPB is in itself one important indicator of just how badly Brexit has failed. The big question emerging now, which is likely to pervade the next six years and more of politics, is what to do about that failure. It is only an ‘emerging’ question because, clearly, things are not so neat as that. Some are still fighting a rear-guard action to dismiss the damage of Brexit as the extension of ‘Project Fear’, generally invoking cherry-picked statistics or making bogus claims about vaccines or the Ukraine War, and will no doubt continue to do so forever.

However, that is increasingly the preserve of unpersuadable diehards. There will never be unanimity, but there’s no sensible way of denying that the consensus view of those economists and others with relevant expertise is that Brexit has been, and will continue to be, economically damaging. On this blog, including in the April ‘failure’ post, I’ve cited numerous studies to this effect. Under the telling headline ‘the deafening silence over Brexit’s economic fallout’, this week the Financial Times provided an overview of the evidence (£) showing the damage, drawing on studies from the LSE and the Peterson Institute amongst others. Meanwhile, the Resolution Foundation produced a major new report about the mainly negative impacts on productivity, wages, household incomes, investment and competitiveness, and three major US banks warned that the UK would experience “searing inflation” for years because of Brexit. The idea that all the academics, thinktanks, banks and consultancies have, as David Frost suggested yesterday, “an axe to grind” and their analysis should be ignored is, frankly, puerile.

Indeed, the economic damage is now built in to the government’s own budget plans and modelling and, as mentioned in several previous posts, there are many signs that Brexiters themselves are coming to accept the failure of their project. Jacob Rees-Mogg’s refusal this week to publish any assessments of the success of Brexit itself shows that the government knows it has failed, for you can be sure he would do so if even the slenderest evidence of success existed. So whilst the diehards will continue to decry the damage reports as remainer propaganda, we are seeing, as I argued in a recent post, the gradual revelation of the ‘public secret’ of Brexit’s failure. It’s on the assumption this process continues, and what a New Statesman editorial this week calls the “conspiracy of silence” over Brexit breaks, that the question of how to address its failure becomes crucial.

The Brexit Ultras’ answer

In this context, this week’s widely reported-on document from the Centre for Brexit Policy (CBP), entitled Defining Britain’s Post-Brexit Role in the World, is illustrative and important. In its own way it is an acknowledgement that Brexit has not yielded tangible success, although it ascribes that to the government’s half-hearted implementation rather than to any flaws inherent in Brexit, and tries to chart a future path that will deliver such success for the nation. Not that it is in any sense a blueprint for national unity, being a highly partisan, not to say a paranoid, document, speaking of “rejoiner plots” that are “led by Tony Blair” (p.31) and replete with disparaging references to ‘remainers’.

Crucially, its collective authorship of seventeen are mostly readily identifiable as ‘the usual suspects’ associated with the CBP and similar groups, and partly as a result its proposals are both predictable and predictably flawed. So, for example, although the report is not mainly concerned with trade or economics, where these are discussed it rejects the gravity model of trade, in which geographical proximity is a key factor in trade volumes (p. 39). It’s a model endorsed by the vast majority of trade economists but there are a small number of exceptions, such as Professor Patrick Minford. And, what a surprise, amongst the collective authors we find … Patrick Minford. Reality, at least as understood by the vast majority of those competent to judge, is simply discounted (in this case by the usual trick of disaggregating EU trade into that with individual member states) which makes it hard to regard it as a serious analysis.

This same echo chamber quality permeates the report which, as regards its main geo-political focus, puts huge weight on the Special Relationship with the US (p. 41), the Anglosphere+ (Australia, New Zealand, Canada, India and, um, Japan), and the Commonwealth which, we’re told, “is much more than politics. It is the sense of instantly if indefinably feeling at home in each other’s lands; of the smells of shared, fusion cuisines, shared passions for cricket and rugby, of the Commonwealth Games, of the Duke of Edinburgh’s Award Scheme” (p.34) and which “looks to the UK for leadership” (p.56). It’s hard to know whether to laugh or cry at an analysis so naïve and so inattentive to modern history, but finding John Bolton and Alexander Downer (the former Australian Foreign Affairs Minister who is a leading opponent of Australian Republicanism) amongst the collective authorship helps to explain it.

A less partisan and more realistic account would recognize that for many years now the special relationship has been something of a diplomatic fiction, and one reduced by Brexit because of the loss of the ‘transatlantic bridge’ role. That isn’t to deny there is an important relationship, especially in intelligence services, but it shouldn’t be over-stated. Certainly the days when Australia, New Zealand and Canada looked to the ‘Mother Country’ are long gone, and Australia, in particular, is set to at least reconsider republicanism when the Queen dies. That will also be a pivotal moment for the future nature of the Commonwealth, and Professor Philip Murphy, Director of the Institute of Commonwealth Studies at the University of London thinks that “perhaps the Commonwealth has historically run its course and what you’re really seeing now is the ghost of an organization”. Murphy, who as his job title implies, is a leading expert on the topic, has also written a book that debunks many of the myths the CBP report relies on.

So, at the very least, these are questionable materials from which to build a sustainable post-Brexit future and, as with trade issues, the problem with the CBP approach is that it’s not based on the deep expertise of specialists but instead put together by those whose allegiance is to the Brexit project and discounts or downplays any expertise that contradicts what they would like to be true. The authors of the report would, no doubt, dismiss such criticisms as ‘elitist’, and perhaps enfold them into the category of the ‘declinism’ which they hold responsible both for Britain having joined the EU in the first place and for having failed to capitalise on its post-Brexit opportunities.

But this kind of Brexit ‘revivalism’ is as problematic an account of British history as declinism itself, with both being “symptoms of a nation unable to come to grips with its place in the world” as the historian Professor David Edgerton recently put it. Again, Edgerton is an expert on (and indeed himself a critic of) declinist explanations of British history. Both declinism and revivalism simply get in the way of realism, by constantly invoking historical myths or boosterish projects rather than serious strategic thinking which, to be successful, has to be based on the best available evidence. That evidence also needs to be understood, whereas Phillips O’Brien, Professor of Strategic Studies at St Andrew’s University, whose groundbreaking work on Britain and WW2 is cited in the report, says the authors do so in a way that convinces him they “have no idea what they are saying”. O’Brien also describes the report as a whole as “witch-burning” and “substanceless” and says that the authors “have no realistic understanding of Britain’s place in the world”.

Unsurprisingly, the “witch-burning” comes to a crescendo in proposals for a wholesale ‘reform’ of the Civil Service, which is depicted as being in the grip of declinism and of its supposed “bias against Brexit” and “continuing obstruction” of post-Brexit initiatives (p.87). This has been the perpetual cry of Brexiters since 2016 and it continues for the same reason: because the Civil Service has to enact real policies, it can’t indulge Brexiter fantasies. Since these fantasies persist in the echo-chamber world of bodies like the CBP, the only recourse is to posit that if the Civil Service were true believers then the fantasies would become real. But whereas expertise can be ignored and evidence cherry-picked in order to develop proposals, a Civil Service is needed to deliver policy - so the answer is to get a new one. If this becomes the template for Britain’s post-Brexit future then it will be as doomed to failure as the Brexit process itself because however strong belief is, reality always trumps it.

Why does the CBP report matter?

Despite its evident weaknesses (which would take a book to catalogue) the CBP report matters. Like several similar outfits under various names over the years, the CBP has close affiliations with the ERG MPs. Its Chairman is still the disgraced ERG ex-MP Owen Paterson, and its Fellows include ERG MPs Iain Duncan Smith and David Jones, both listed as authors of this latest report. Time and time again the propositions put forward by such groups move from being the apparently fringe meanderings of extremists to becoming pretty much government policy.

The most important example is the CBP’s July 2020 report on Replacing the Withdrawal Agreement. Some of it has been overtaken by events, but its wholesale objection to the NIP can be seen as setting the direction of travel that has resulted in the current NIPB. This, of course, was months before the NIP came into effect and so was plainly not motivated by the unexpected impacts of its operations.

The chances of the ideas in the latest CBP report, and the closely related deregulatory agenda, having an impact are considerable. That is partly because of Johnson’s current political weakness, making it easy to push him around, limited only by the fact that the Ultras’ wilder proposals would be wildly unpopular with the electorate. It is also for the more fundamental reason that – and in this respect, at least, the Brexit Ultras are right – he and his government have never had any coherent post-Brexit strategy, and indeed hardly mention it beyond boasting that it has ‘been delivered’.

Just as in 2016 there was no plan for how to do Brexit and the Institute for Government was warning that “silence is not a strategy”, so, now, the Brexit government has no plan for what to do with Brexit, as this week’s unveiling of Rees-Mogg’s risible Brexit ‘Public Dashboard’ illustrates. Now, as then, that leaves a vacuum into which the Ultras can push their agenda for the coming years. Crucially, apart from the content of that agenda, that means the continuation of an approach based on wilful distortions of evidence and reasoning, denial of reality, and hyper-partisanship.

This is the reason why things like the CBP report should be paid attention to. For what is at stake now is not Brexit – the question of whether to leave the EU or not - but the multiple severe problems Britain faces, problems which include social and regional inequality, poor productivity, crumbling infrastructure, a rentier economy, and declining living standards. No doubt there are others (including many, such as climate change, which aren’t specifically national) but as a core list it would probably be accepted by people of most political persuasions, including those with different views of Brexit.

In an interesting essay in The Atlantic this week – not all of which I agree with - Tom McTague makes the point that whilst Brexiters need to face the fact that leaving the EU has worsened many of these problems, erstwhile remainers need to accept that they did not begin with Brexit. I certainly don’t have any problems accepting that, though all it suggests to me is that Brexiters were wrong to say that the UK was not free to make its own, often poor, policy choices whilst in the EU, and then exacerbated them by leaving. The implication of that is to make better policy choices now, which includes acknowledging and limiting the damage that Brexit has done, and part of that includes – and here I agree with McTague’s implication – ceasing to treat 2016 as the sole, defining moment of recent British history.

Looking towards 2026

There’s no realistic prospect of the present government doing this. I suppose it’s remotely possible that a future Conservative government could, and Nick Tyrone, author of This Week in Brexitland, has argued that it may well be such a government that will eventually take us back into the single market and even the EU. But that is at best a very long-term prospect and what matters in the more immediate period, given there will be a General Election by 2024, is the other part of the vacuum, namely Labour’s near silence on Brexit. In a recent post I wrote about how Labour have the chance to lead the debate and, though I’m hardly the first person to have made that observation, my post attracted a fair bit of comment on Twitter with some suggesting (as indeed Tyrone argues) that this ignores the electoral risks to Labour of re-opening the Brexit debates and divisions.

I’m not, of course, unaware of those risks. I’m also aware of my own biases. I spend much of my week reading for and writing what are now normally 3000-word blog posts, and over the last six years have written, in various places, well over a million words about Brexit. So I recognize that I’m not exactly typical, that I’m far more likely than most to see merit in talking about Brexit, and therefore highly prone to understating the damage that doing so might do to the Labour Party.

Against that, Alastair Campbell – who knows more than me or most people about political strategy and communication, and who is passionately committed to Labour’s electoral success – also believes that Labour should and could be speaking more directly and forcefully about the damage of Brexit, and ways to mitigate it. Labour MP Stella Creasy has said something similar this week. And, whilst not explicitly mentioning Labour, former Foreign Secretary David Miliband has recently tweeted about the need for “an honest debate about how to limit the damage” of Brexit. Then, just yesterday, Shadow Foreign Secretary David Lammy unveiled some limited ideas on how Labour would try to develop the existing Brexit trade deal, although it remains to be seen how forcefully even these will be pursued. These ideas are a step in the right direction but as yet they fall short of providing the necessary leadership.

Why Labour needs a policy

Clearly there are electoral risks in alienating leave-voting potential Labour supporters, but there are also risks on Labour’s other flank, with its present flaccid stance alienating to the very large number of remain-voting potential Labour supporters. Of course there’s a view that Labour can afford to lose some of these to the LibDems or Greens in urban areas where Labour has huge majorities if it enables them to hold on to, or attract back, ‘Red Wall’ voters, and it may be re-enforced by today’s Wakefield by-election result. However, that ignores how Labour seats in very strongly remain-voting areas like Cambridge (26.3% leave) or Hampstead & Kilburn (23.7% leave) could be lost to the LibDems given not inconceivable swings (9% and 13% respectively), or how Conservative seats that Labour might hope to win on very small swings, like Chipping Barnet (41.1% leave, 1% swing to Labour needed)  or Chingford (49.9% leave, 1.3% swing to Labour needed), might remain Conservative by virtue of disaffected remainers voting LibDem, or not voting at all.

And then there are Labour marginals like Warwick & Leamington (41.6% leave, Tories need 0.7% swing) and Canterbury (45.3% leave, Tories need 1.5% swing), which Labour could lose for lack of remainer support. Beyond such seats, even in those which had majorities, even large majorities, of leave voters, could still be affected by remainers feeling inadequately represented by Labour. In short, Labour can’t simply focus on its leave-voting actual or potential supporters and think that it can bank its remain-voting support.

This can also be put in a different way. Brexit isn’t automatically good territory for the Tories. No doubt it’s true that Johnson believes it would help him to pull Labour on to it, hence they resist going there, but that doesn’t mean he is right. It is not 2016 or even 2019 anymore. Of course the hard core of Tory leave voters will be galvanized by Brexit coming up the agenda again, but opinion polls show a clear and consistent lead for the view that Brexit was a mistake over those thinking it was right, and that many voters, including at least some who voted leave in 2016 and/or Tory in 2019, are now disillusioned by the way it has been done by Johnson including, as the NIPB amply shows, the emptiness of his promise to ‘get Brexit done’. It’s notable that yesterday, the anniversary of the referendum, two leave-voting seats rejected the Tories in by-elections. That may be more about Johnson than Brexit, but either way it is very far from clear that Labour will be monstered if they hold his Brexit record up for scrutiny. But to do that they need to a have a good and suitably crafted answer to the inevitable question: what would you do differently?

The policy that Labour needs

That does not mean a ‘rejoin’ policy, which would effectively go back to the in-out question of 2016. I don’t think that’s in prospect for years, perhaps not ever. It need not even mean a single market policy, and although some, including recently Labour frontbencher Anna McMorrin have called for that, it’s clear from what Lammy said yesterday that Labour are not going to endorse that for now, and I suspect that will hold right through to the election. However, that doesn’t mean that a Labour-led coalition – perhaps the most likely outcome - would not adopt it.

But it could certainly include a commitment to extensive regulatory alignment – perhaps, as, again, David Miliband has recently suggested, for a specified period of five or ten years – to include Sanitary and Phyto-sanitary (SPS) alignment. In itself, that makes the Irish Sea border substantially thinner. Temporarily or permanently abandoning the UKCA mark, already postponed by the government, would barely be controversial but would make life a lot easier for UK businesses. Both of these things go substantially beyond the Lammy proposals, especially as it’s not clear whether the SPS deal he alluded to implies full dynamic alignment. Proposing to add a mobility chapter to the TCA so that musicians and other service providers could more easily travel within the EU would be an equally pragmatic position, and one which Lammy appears to have suggested Labour will endorse.

It's worth recalling that none of the things listed above was remotely controversial even amongst most committed Brexiters until very recently. It is only the rapid radicalization of their demands that has led to the scorched earth ‘sovereignty-first’ Brexit delivered by Johnson and Frost. Labour can, with absolute truth, say to leave voters that this was not the Brexit they were promised. Even leaving aside the whole soft versus hard Brexit issue, a core Brexiter claim was that sovereignty would mean the UK choosing for itself which rules it wanted to follow, according to its own best interests. It didn’t mean eschewing all regulations other than those unique to the UK. So it is perfectly reasonable for Labour to argue that alignment is currently in the UK’s best interest, and to commit to it.

In this way Labour could develop a position that allows them to criticise the damage Brexit is doing and provide a pragmatic alternative, and to do this not as ‘re-opening Brexit’ but as part and parcel of a wider policy offer on the economy, in particular. It won’t please everyone, but nothing will. Crucially this, or a more fully developed version of it, would be a policy rather than the present policy vacuum. That, just in itself, would change the terms of the debate. If Labour won the next election, it would also change the delivery of policy.

Beyond Brexit

The perennial political mistake is to fight yesterday’s battle. To some, that implies, indeed, that Labour should relegate Brexit to the past. But this is to fundamentally misunderstand how Brexit is a still ongoing process and that the post-Brexit condition is the necessary context of all policymaking. This means that those resisting discussing Brexit are actually trapped in yesterday’s battle, thinking it means the 2016-2019 battle over leaving the EU. Indeed Alastair Campbell (in a personal communication) “thinks Labour are fighting the last battle not the next one, which is to re-build Britain’s economy and reputation after austerity, Brexit and Covid, the ABC that has done so much damage”.

That can’t be done without mentioning the damage of Brexit, any more than it can without mentioning that caused by austerity and Covid. The Tories may want to continue to see Brexit through the prism of the dead question of leaving or remaining in the EU even if this has declining salience even in leave-voting areas (as Guardian journalist John Harris suggests, also invoking the motif of ‘generals fighting the last war’, but applying it to Johnson). Labour does not need to do so and should not do so. The new, living, Brexit question, and it is not just a question for Labour but everyone, is: what now?

At the moment, we are still on the cusp. Much of the content and terms of the debate are the same as they have been in the six years since the referendum. That won’t disappear, but it is beginning to shift and in the next years will do so even more. That’s inevitable just because of the passage of time. It’s also because one of the few Brexiter slogans which was true, albeit perhaps not as they meant it, was ‘we’re leaving the EU, we’re not leaving Europe’.

So, here we are, having left the EU but not left Europe. The question, then – and it’s a question with profound implications for economic, foreign, defence, security, science, and many other policy areas – is the nature of that inevitable relationship. This is acknowledged by the CBP report (p.75), but predictably refracted through the hostile and unrealistic lens of seeing the EU as “declining” (declinism being a permitted narrative when applied to the EU), “incoherent” and relatively unimportant, and to be approached more through bi-lateral relations with member states than with the EU bloc.

But the Brexiters do not own this question or its answers, and if they are allowed to do so by default and others’ silence then the failures of Brexit so far will be compounded by those of the coming post-Brexit period. In particular, the UK’s approach to this question needs to break with the evidence-distorting, logic-twisting, reality-denying mentality that has characterised the Brexit process so far.  Crucially, whilst the question arises as a result of the referendum of six years ago the answer is not, as they want it to be, in any way specified by that referendum. This is the coming battle, and it is going to be central to the politics of Brexit for at least the next six years.

*Note: Updated/ corrected at 10.40 on 24/06/22 because an earlier version of this post incorrectly stated that no date had been set for the second reading of the NIPB.

Brexit limps on

We’re probably long past the closing date for nominations for the prize for the most absurd and mendacious comment about Brexit, including the category reserved for those made by Boris Johnson. If not, a strong new entry would be his comment this week that he will get rid of the “ludicrous” checks on the Irish Sea border, and yet again threatening to invoke Article 16 of the Northern Ireland Protocol (NIP) as he has been doing since at least 13 January (less than two weeks after it came into operation, and before, be it noted, the EU’s quickly abandoned plan to do so over vaccine shipments).

Ludicrous is a useful word here, since this is the border Johnson said he would never agree to, then agreed to, then said he hadn’t agreed to – all within the space of a few months. But beneath the latest bullish assertion is the rather different proposition that the issue is one of different “interpretations” of the NIP, and the need to “sandpaper” the border arrangements. This implies that, at least for now, the wilder demands from some Brexiters and unionists to ditch the NIP altogether are not going to be met.

This is consistent with Tony Connelly of RTE’s fascinating account of the meeting last week between David Frost and Maris Sefcovic, and its aftermath. This suggests at least a degree of returning goodwill and the continued dialing down of antagonism, as discussed in my post earlier this month. For example, the ‘hotline’ between the two co-chairs, that had existed before Frost took over from Michael Gove, has been re-instated.

More generally, the focus seems to be on technical fixes rather than political posturing (although it is worrying that Frost still appears to think that the fact that UK regulations were fully aligned with the EU on 31 December is a matter of any relevance to the post-Brexit situation in which the UK is not committed to retaining alignment). Along with the high-level improvements in tone, there are reports from business groups (£) on the ground in Northern Ireland of intense and serious efforts by the government to create compliance with the NIP, and, belatedly, signs that the Joint Consultative Working Group for the NIP is about to get going.

Reliably unreliable

All of this is better than might have been expected given Frost’s previous rhetoric and conduct. Of course it doesn’t mean that much. He may ramp the antagonism back up again for the reasons I suggested in that earlier post. It could also just be a prelude to Johnson-Frost declaring that they genuinely tried to make the NIP work, but that the EU wouldn’t cooperate and so now there is no choice but to suspend, or even renege, on the NIP. Some, no doubt, will even say that ‘that is the plan’. But my view is that, as with the negotiations that led to both the exit and future terms deals, it credits Johnson with far too much acuity to imagine that there is a ‘plan’ as such.

In fact the comparison with those negotiations is an apposite one, because what all the talk of “interpretation” and “sandpapering” codes is that what is now happening is the kind of discussion about what the NIP means in practice that should have occurred then. But Johnson and his government were fixated solely on ‘getting rid of the hated backstop’ and, later, ‘getting Brexit done’, and are only now getting round to disentangling the cart from the horse. In short, the only reliable predicter of Johnson’s behaviour is what seems to be in his personal interest on a particular day. Trying to discern a long-term ‘plan’ in that behaviour is, metaphorically speaking, like mistaking the priapic compulsions of a sex addict for a recitation of wedding vows. Come to think of it, in this case that is not a metaphor.

Given that, some of the findings of a new opinion poll conducted for the Queen’s University Belfast’s ESRC-funded Post-Brexit Governance project may not be that surprising. Whilst opinions on whether, overall, the NIP is a good or bad thing are fairly evenly split, a staggering 86% distrust or distrust a lot the UK government's ability to manage the NIP in the interests of Northern Ireland (and only 1% ‘trust a lot’ in the UK government to do so).

The rush to judgement

That aside, amid continuing reports of the damage Brexit is doing to individual businesses, this week has seen more dreary (though, as I’ll discuss below, politically meaningful) attempts to pronounce a verdict on the impact on trade based on the February bounce back. The most egregious of these was Wolfang Munchau’s Euro Intelligence briefing that Brexit has been a “macroeconomic non-event” on the basis of those February figures because they show that “UK exports have fully recovered”. This is based on the fact that “they were up 46.6% after falling 42% in January”.

But, alas, as the distinguished economist Professor Jonathan Portes pointed out (though it’s necessary to be neither an economist nor distinguished to realise it) this was based on a basic arithmetical error: these figures mean an overall fall of about 15%, not ‘full recovery’ (if X = 100, then after a 42% fall it is 58, and then a 46.6% increase brings it up to about 85).

Munchau also regurgitates the idea that modern economies are becoming all about data trade (i.e. the ‘weightless economy’ mantra that’s been around for decades) and makes the claim that gravity models of trade (i.e. that geographical distance matters) only apply to goods trade. The latter has long been a favourite idea amongst Brexiters, such as former International Trade Secretary Liam Fox, who talk of a ‘post-geography trading world’, but it is largely incorrect.

If we must analyse the limited data available so far, the UK Trade Policy Observatory or the Tony Blair Institute are better sources, and there was also a surprisingly good discussion in the Telegraph (£). But as all these recognize it really is too early to say yet what the overall effect will be (I have consistently said this since the end of the transition, by the way, whether the data were ‘bad’ or ‘good’ for Brexit). Apart from anything else, we have still to see much detail on the effects on services, rather than goods, trade. But it seems obvious by definition that the creation of trade barriers reduces trade. In any case, as the Independent’s Economic Editor Ben Chu points out, the main trade damage predicted for Brexit isn’t an absolute reduction in trade with the EU but a reduction in the growth in trade that would otherwise have occurred.

The other key point, made very neatly by Professor Gerhard Schnyder in his most recent Brexit Impact Tracker blogpost (which also has a lot of really excellent detailed discussion of the various debates about the trade figures), is that the benchmark for judging the success or otherwise of Brexit isn’t the predictions of those who warned against it but the promises of those who advocated it. From that point of view, it’s not even enough to show some post-Brexit good news (£). What matters is to show that it was caused by, and couldn’t have occurred but for, Brexit.

Why the costs of Brexit (still) matter

These latest skirmishes over the costs of Brexit are an illustration of how Brexiters have long been caught in the trap of claiming, in the same breath, that the economic consequences of Brexit will be good (or at least not bad) and that Brexit is nothing to do with economics and all about sovereignty and independence. If the latter were really true, then there would have been no need for their entire ‘Project Fear’ narrative. It was only by mobilizing the argument that there would be no economic costs that enough voters could be made to take a punt on sovereignty.

In that regard, this week saw the publication of a very interesting new report from the UK in a Changing Europe research centre about leave voter motivations. This is by no means a dead issue, because there is – at least possibly, if not probably – likely to be some kind of link between how people regard Brexit now it has happened and what they thought they were voting for in 2016. The ‘headline’ finding of the report was about how the image of leave voters as the ‘left behind’ is an inadequate one, and that many were ‘comfortably off’. That’s not exactly new, but it is a useful myth to bust if only because of the sanctimonious and hypocritical way that so many rather privileged Brexiters claim their project as an anti-elitist one.

What is more interesting about the report is how these comfortable leavers, whilst not necessarily expecting a personal economic benefit from Brexit, do envisage its benefits in economic terms. For example, they talk of it leading to increased investment because of the money (supposedly) saved and the rebuilding of manufacturing industry. This may not be surprising because, despite what was subsequently claimed, the headline Vote Leave slogan of £350 million a week for the NHS was an explicitly economic one, and over and over again the campaign materials hammered away the arguments such as that there would be more money for public services, cheaper food, and that small businesses, especially, would be more competitive when freed from EU red tape.

Of course the other headline slogan was ‘take back control’ – the sovereignty lure – but the point is that the two were made in tandem. It is simply not true that the leave case was an emotional one for independence and the remain case a rational one for prosperity. More accurately, the leave case was that sovereignty was cost-free and the remain case was that it had a price (and, in the process, foolishly conceded the false claim that sovereignty was something that had been lost). It was only afterwards that leave voters were told that they had voted for sovereignty regardless of the costs. Nor, therefore, is the frequent suggestion that remainers and leavers are talking past each other true. They make different claims, obviously, but they are claims about the same thing.  

It is this which makes current and ongoing debates about the costs of Brexit so important. The reason Brexiters want to deny them is the same reason they ran the Project Fear attack line. They know it is one terrain within which the battle for public opinion will be fought and won. Not the only one, for sure, because there are plenty of cultural (and psychological) reasons why leave voters will continue to support Brexit even if they perceive it to have been economically damaging. That is also one reason why there will always be a political temptation for Johnson to manufacture a row with the EU, for example over the NIP. But Brexiters know full well that were they to admit the economic costs but say that they don’t matter then at least some of their support would crumble. As with the debates about who voted for what, and when, discussed in last week’s post, this is still live politics which explains the claims and counter-claims about trade figures.

Proustian Brexit

Another aspect of Brexit that the UK in a Changing Europe report captures is that of nostalgia, and again it is part an economic nostalgia for lost manufacturing industries but, again, it is a mix of the economic and cultural in envisaging that with that will come a regained British “pride”. It is another example of the disjuncture between the rank-and-file leave voters and some of the leading Brexiters and their cheerleaders that, amongst the former, we do not seem to find much interest in a ‘weightless economy’ or a ‘post-geography trading world’.

Like other elements of Brexit nostalgia – ‘we managed perfectly well before’ – it seems to envisage the referendum as having been a kind of time machine. And there is a sad irony in that for, in a way, what the Trade and Cooperation Agreement has done – with its central provision of zero tariffs for goods trade ­– is to configure UK-EU trade as if for a past era of British manufacturing. But that won’t recreate that era, and is largely irrelevant to the present one. Meanwhile, the industries for which Britain might nowadays feel a legitimate pride, such as culture or design, are likely  to take a terrible hammering because of loss of single market membership and of freedom of movement of people.

Indeed, it’s becoming ever-clearer just how much ending freedom of movement of people, in particular, is going to damage Britain. The recent population drop caused in large part by the pandemic will accelerate that, in tandem with the demographics of an ageing population. How it will play out remains to be seen. The effects will be multiple and varied. In some industries, perhaps especially agriculture and retail, it is more likely to mean increased mechanization than increased wages or job opportunities for British workers.

Some of the respondents in the UK in a Changing Europe report suggest that ‘lazy’ British workers will be forced to take up the slack, but that rests upon numerous myths both about this supposed laziness and the supposed generosity of the benefits system. It’s of note that this week it was quietly announced that the Pick for Britain scheme has ended in failure, and there is now a cabinet split (£) over increasing the quota for temporary work visas for jobs like fruit picking. Overall there may well be increased employment of immigrants from outside the EU – hardly, perhaps, what many leave voters envisaged – and it’s quite likely that loosening visa restrictions will be a requirement of making trade deals with, for example, India, especially if there is to be much liberalization of services trade.

Whatever may happen with immigration following Brexit, nothing can replicate the incredible freedom to come and go at different times and for different reasons, economic and non-economic, that have been sacrificed. We haven’t lost that in order to regain the past. We’ve just lost it and entered a diminished future.

 

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Less than a hundred days left

By recent standards it has been a relatively quiet Brexit week, although also a revealing one in which several chickens have come home to roost as the end of the Transition Period looms ever closer.

The official negotiations resume next week, whilst the ongoing unofficial talks are reported to be progressing “a bit better than expected” according to an EU official. That perhaps means little given how low expectations must have been after the fury in Brussels caused by last week’s events. One cause of that fury – the wholly spurious claim of an EU threat to blockade Northern Ireland’s food supplies, as discussed in my previous post – has been quietly dropped by most politicians for the nonsense it is, although even that was portrayed in the Brexiter press as ‘Barnier caving in’. The damage, of course, is already done.

The IMB fallout

The bigger cause of that fury remains in play, with the passage through Parliament of the Internal Market Bill (IMB), the measures of which include, on the government’s own admission, a knowing breach of international law. However, the rumours I mentioned in my previous post to the effect that the government would seek to slow down the passage of the legislation so as to avoid a confrontation with the EU until after no deal seems inevitable (if that is what happens) seem to be true (£). And if there is a deal the offending clauses may be pulled. Meanwhile, whilst continuing to consider the possibility of taking legal action (£) the EU is holding off doing so for now. The sense is that, for the time being, both sides want to pull back from last week’s row and, as Peter Foster of the FT puts it (£), “a grudging truce has settled back” over the talks.

Nevertheless, the reverberations of Brandon Lewis’s incendiary statement about breaking international law, which is still being defended by the Attorney General, continue to be felt. Some MPs have tried to downplay the significance of what Lewis said but Theresa May, in particular, launched a blistering attack on it during the committee stage this week. For reasons I’ve given elsewhere I do not buy the line that May’s deal was one that should have been supported, and personally I doubt that history will treat her kindly. Much of the current Brexit mess can be laid at her – and her advisers’ - door for the early decisions she made, and for those she did not. Even so, she has recognizable political principles which is a very marked contrast with the corrupt, incompetent and anarchic mess of the current administration.

One indicator of how that administration operates came with the report (£) that Brandon Lewis’s statement was effectively dictated to him by a Downing Street advisor “who gave [him] the words to say”. The advisor, Oliver Lewis (no relation, I assume), is one of several central figures from the Vote Leave campaign – he was its Research Director – who, led by Dominic Cummings, are now installed as special advisers and seem to have been allowed by Johnson to become the de facto government. Many of them are very young, have little or no experience of government and, it’s perhaps fair to say, a greater degree of confidence in their own abilities than a more objective analysis would warrant.

The report stresses that Boris Johnson was barely involved, but perhaps even more shocking is the idea that a member of the Cabinet should, apparently, be taking orders of this sort from an advisor. But it is a measure of the extent to which this under-achieving but over-empowered cadre are able to wreak havoc, whether through abrasive arrogance or plain incompetence. For Brandon Lewis’s words, spoken at the dispatch box of the House of Commons, will leave a long and damaging mark, regardless of the fate of IMB.

Are you ready? Er, no

Oliver Lewis is Johnson’s ‘no deal’ adviser, and is reported to have repeatedly blocked progress in the negotiations with the EU. Whether or not he continues to do so, this week saw the passing of the notable milestone of it being only 100 days until the transition period ends – there are far fewer working days, of course, and fewer still until a deal, if there is to be a deal, has to be finalized for ratification. A new government communication drive marked this moment by asking “are you ready?”.

The answer from numerous business sectors is a resounding no, almost as much so if there is a deal as if there isn’t. The issue here is partly that businesses are overwhelmed by dealing with coronavirus, but the truly shocking thing is the lack of clarity over what they have to prepare for. This was re-affirmed by reports of a meeting at the end of last week between the government and the road haulage industry, which pronounced it “a washout” as the government was unable to provide the details needed of how border systems will operate. As regards business more generally, the British Chambers of Commerce this week published a list showing that no less than 26 out of 35 key questions about a range of post-transition issues remain unanswered.

Road haulage is a crucial industry, so it is a very serious matter that is not likely to be prepared even if there is a deal. This week a leaked letter from Michael Gove suggested that a staggering 70% of EU-bound trucks might not be ready for the new border controls, leading to thousands of lorries facing two-day waits at Dover (in passing, note that almost all the focus seems to be on Dover: much less is said of the significant problems other ports will face).

Subsequently, speaking in parliament, Gove revealed that only a quarter of businesses believe that they are fully ready for the end of the transition period (and that doesn’t necessarily mean they are, by the way), whilst an astonishing 43% believe that the period will be extended. Unless the data were collected before the end of June that is, effectively, an impossibility and perhaps reflects a complacency born of the repeated Article 50 extensions.

But his most remarkable, almost surreal, statement was that, in order to reduce congestion at the ‘short Channel’ ports, there will be a de facto border for trucks entering Kent, which will need special ‘Kent Access Permits’ to be enforced by the police. Who knew that ‘taking control of our borders’ was going to lead not just to erecting a new one in the Irish Sea, but also one around Nigel Farage’s home county?

Separately, it has recently been reported that the development of the new IT systems that will be needed for the UK-EU border is in chaos, and a study published this week by the LSE shows the extent of the disruption to supply chains, especially in the food and drinks industry, that will occur at the end of the transition, again especially if there is no trade deal in place. And a new British Chambers of Commerce survey finds that 52% of UK firms trading internationally have not yet considered the effects of Brexit. But some industries, such as banking, are continuing to shift jobs and operations from the UK to the EU without waiting to see if a deal is done or not.

Whereas the damaging effects of the new border controls will be immediately obvious – queues, supply disruptions and price rises – those of things like banking relocations and their associated impact on tax revenues will be less visible, but no less real.

Incompetence piled on dishonesty …

Since most of the new customs requirements will exist regardless of whether there is a trade deal, the government has been woefully neglectful in leaving the preparations so late. This can be chalked up to general incompetence but there is also a specifically Brexity twist to it. For years talking about the need for such preparations was either dismissed as more Project Fear or made more difficult to admit or be taken seriously because of the ingrained power of the Project Fear narrative. Relatedly, even now there are still  Brexiters, perhaps including some in government, who genuinely believe that there is some form of trade deal which avoids the need for borders, as if it were possible to have  “the exact same benefits” as single market and customs union membership.

After all, it was not until February 2020 that the Border Delivery Group was established (as an aside, later, its leadership appeared to be a casualty of the witch hunt for supposedly ‘remainer’ civil servants), and although that was not the beginning of the government’s border preparation work it was the first point at which it was officially acknowledged that ‘frictionless’ trade post-Brexit was impossible.  

It is worth pausing to reflect on the almost unbelievable dishonesty of this. Even soft ‘Norway style’ Brexit would have had some implications for border friction, but from the moment in January 2017 when hard Brexit became confirmed as the official position any possibility of anything like ‘frictionless’ trade disappeared. No free trade agreement could prevent that. Many experts on trade and customs, many business groups, and many commentators including relative minnows like me were screaming this. Yet it was three whole years before the government officially accepted that this was so, and even then it was not until July 2020 that it published its ‘Border Operating Model’, less than six months before it needs to come into force.

We already know that one of the government’s responses to the border chaos which on Gove’s admission now seems inevitable will be to blame businesses for lack of preparations, which is outrageous considering that the government still can’t give precise details of what they need to do. But we also glimpsed another of the ways the government will respond because it was pre-figured by DEFRA Secretary George Eustice in Select Committee evidence this week: blaming it on the “failure of the EU to plan”. It’s a charge as predictable as it is ludicrous (see the various reports in the Twitter thread link).

Such responses are at one level just boilerplate political blame deflection but, more profoundly, exemplifies the refusal of Brexiters like Eustice ever to take responsibility for the consequences of their actions. For that reason alone, it’s important to keep recording and reminding people of the promises that were made for, and the lies told about, Brexit.

The consequences of no deal would of course be that much greater – as set out in an excellent, comprehensive report this week from the UK in a Changing Europe thinktank, covering not just trade but implications for transport, data, citizens, Northern Ireland, and security amongst other things. One issue not mentioned, but in the news again this week (£), is the ongoing saga of Galileo, the EU’s GPS satellite navigation system, with the announcement that the UK has abandoned attempts to build its own alternative system and the suggestion at least that the UK might try to rejoin Galileo.

This is a convoluted story, going back to 2018 when Theresa May pulled out of talks with the EU because of its insistence that the UK could have only limited, third country access to the system and announced that the UK would build its own version (although some experts thought that a compromise deal was possible) at an estimated cost of £5 billion.

That idea was enthusiastically taken up by Johnson (and reportedly driven by, again, Cummings against, or without, expert advice) who decided to buy a bankrupt satellite firm, OneWeb, to deliver it. But in June this year substantial problems emerged (the whole sorry story to that date is well told by Alex Andreou in Byline Times) and the idea has now been dropped. It is unclear at this point what will happen, but the impacts for businesses and for defence are massive. Again, there is less than 100 days to sort this out, but that timescale is a luxury compared with that faced by some UK citizens living in the EU who are customers of those banks which this week announced their accounts would be closed – in some cases before the end of the year.

Piled on even more incompetence

It is becoming clearer by the day, especially in the light of the predictable resurgence of coronavirus, that Johnson’s refusal to extend the Transition Period when he had the chance was a major and possibly catastrophic error of judgment. Far from putting pressure on the EU to ‘blink at the last minute’, it has left Britain woefully unready to cope even if there is a deal. As with the inevitability of an end to frictionless trade, the government was warned over and over again by business bodies and others that this would be the case but chose to ignore them.

Whilst far smaller in magnitude, I think it was also an error of judgment for Keir Starmer not to have at least placed on the record at the time that this was a huge mistake. Even now, in his first conference speech as leader, he said very little about Brexit and did not mention the failure to extend transition at all. I understand perfectly that he needs to avoid being depicted as a ‘remainer’, as Johnson wishes to do. But in taking the line that it is for Johnson to deliver the deal he promised, there is room to make reference to his unilateral decision to compress the time available to reach such a deal, if only as a marker for the future. It would sit well within his more general positioning of Johnson as operationally incompetent.

That critique now has real purchase, to the extent of becoming the dominant narrative, because of the way it is being taken up by so many Conservatives and former allies and supporters of the Prime Minister. Just in the last week or so it seems as if a switch has been flicked in this respect, in a way that is remarkable considering he won a majority of eighty less than a year ago. Coronavirus is of course the main driver of that, but I think that the reverberations of the IMB and the ‘breaking international law’ debacle has played its own, not insignificant, role.

On the one hand, it has created a breach between Johnson and some of the hard core Brexiters like Michael Howard. On the other, it has opened up the entire question of competence in a new way for, as Theresa May pointedly asked, “if the consequences of the Withdrawal Agreement were so bad, why did the government sign it”? This in turn links back not just to Johnson but to the arrogance and hubris of his Downing Street operation, for increasingly there are reports (£) of the resentment that experienced MPs and ministers (and, I would assume, senior civil servants) feel about the transparent contempt with which they are treated by the Vote Leave wunderkinds. Bad enough to be subjected to that indignity by those who are competent; intolerable when it comes from those who are serial bunglers.

So, deal or no deal?

All that may well turn out to be bad news for Johnson’s premiership, but it’s not at all clear what it means for the prospects of a trade deal with the EU. That can be argued in two diametrically opposite ways. One is that, stung by the criticism of his failings, making a deal becomes Johnson’s priority so that at least he can claim to have ‘delivered Brexit’, his central policy, in defiance of the ‘doomsters and gloomsters’. The other is that he pushes the button on his no deal threat in order to gain the adulation of the Brexit Ultras and stoke up the populist culture war he thrives on, and once again ignores all of the warnings of just what a disaster that would cause.

Both have very clear risks. Even the thinnest of deals will enrage the Ultras, whilst not avoiding a level of disruption that compounds the narrative of his incompetence. A thicker deal might be a little less disruptive, but enrage them even more. But no deal would be a gift to Labour and, whilst it might appeal to his core vote, the disruption, would, especially on top of the coronavirus suffering, be deeply unpopular. In particular, there is strong polling evidence of how unpopular no deal would be in the ‘Red Wall’ seats.

I’m assuming, of course, that Johnson’s calculation will be based solely upon his own self-interest and advantage, but that’s not an audaciously unrealistic assumption. Where it will lead him, I have no idea and I’ve seen nothing in any of the UK or EU commentary that suggests that anyone else has either. There is certainly no consensus view.

A straw in the wind may be the fairly upbeat report from James Forsyth in The Times this morning (£), because recently his speculations have had an uncanny knack of proving right, suggesting that he has well-informed sources. But it is perfectly possible – even likely - that Johnson himself doesn’t yet know what he intends. In any case, it should never be forgotten that, as Neale Richmond, the Irish politician who has played a leading role in shaping his country’s response to Brexit, pointedly remarked this week, the negotiations are not an internal Westminster debate, despite what the reporting of some parts of the UK media might suggest.

What is clear, for reasons I’ve argued before, and as trade expert David Henig has argued cogently this week, is that from a UK ‘national interest’ perspective a deal is important. As he says, it’s not that a deal will avoid all the disruption – there will still be plenty of that – but that it would at least begin to re-normalise UK-EU relations. I believe this would also be generally welcomed by the EU.

This is really the next big challenge for the UK, and one which erstwhile remainers can and should try to influence. Sir Simon Fraser, former Permanent Secretary at the Foreign Office, has recently set out the many challenges for post-Brexit foreign policy. They are considerable, because of the strategic incoherence of Brexit. But a key part of meeting them has to be to move UK-EU relations away from the entirely antagonistic framing that Brexiters give them, even after having left. That will be hard enough, but without a deal – even a very limited one – to build on it will be made impossible for years to come.

Clearly that hope is precisely why the scorched earth Brexiters want there to be no deal. For the rest of us it is important they don’t get their way. They have had their Brexit – and what a colossal mess they are making of it – but that does not give them licence to permanently poison our relationship with our closest friends.