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.

‘Not for EU’ labelling: a case study of the Brexit mess

An important development in the Brexit process occurred at the beginning of this month, with the introduction of ‘Not for EU’ labels. As well as being important in its own right, it serves as a case study of the utter mess that Brexit has created, a mess which far from reducing ‘red tape’ has massively increased it, and a mess which is both the cause and consequence of multiple confusions. It speaks volumes for just what a mess Brexit has created that even this single issue needs a blog post of over 3000 words to disentangle what is going on, and, even then, only by leaving out a lot of the granular detail.

What is happening?

Since 1 October, all meat and some dairy products moving from Great Britain (GB) to Northern Ireland (NI) have been required to carry labels saying ‘Not for EU’. Goods bearing that label can legally be sold in NI but cannot legally be sold in the EU. This rule applies to such of those products as originated outside GB, including from the EU, if they have come to NI from GB, as well as to those actually produced in GB.

This is phase 1 of the implementation of regulations arising from the Windsor Framework. In phase 2, starting on 1 October 2024, this labelling requirement will also apply to all meat and all dairy products sold within both GB and NI. Finally, in phase 3, starting on 1 July 2025, it will additionally apply to several other products, including fruit, vegetables and fish, again in both GB and NI.

These are the rough outlines of the requirements but, as usual with Brexit, there is a lot of complexity beyond the outlines, in this case about exactly what products are affected and exactly what has to be labelled. The details of this are set out on the government’s website (some of which read like a script from Yes Minister: I particularly liked “if herbs are added to cheese or fruit to yoghurt, they are dairy products as the plant product adds flavour.”)

Although ‘Not for EU’ (NFEU) labels are not yet required for goods sold in GB, there are reports that they are already appearing on products on GB supermarket shelves, with one example, which received attention on social media last week, being an M&S ready meal in a store in Suffolk. Another example, this packet of Sainsbury’s French ham which was on sale in late September with an NFEU label in a store in England, is of note as it illustrates that the labels are applied even to produce originating in the EU.

Their appearance in GB suggests that some retailers have decided it is cheaper to have identical labelling across the UK and/or that it gives them greater flexibility in what stores they can sell the goods in and/or that it saves the costs of undertaking two rounds of package re-design as the phases unroll. For, all other issues aside, it is important to understand that implementing these regulations will cost millions of pounds for each supermarket chain, not to mention the costs for smaller businesses, all costs which are likely ultimately to be passed on to customers as higher prices.

At all events, as this labelling has begun to appear it has already attracted a lot of, mainly adverse, comment, and a certain amount of confusion – in particular, in the idea that the label denotes a ‘deficient’ produce which does not meet EU standards. The reality is, again, more complex. I tried to explain some of this in a short Twitter thread last week, but many of the responses showed that I had not done so sufficiently clearly and, in any case, Twitter isn’t a good medium for complexity. Actually, I also discussed it briefly when it first became clear, last May, what was in prospect, but that probably didn’t attract many people’s interest because at that point there were no actual labels in use. Now that there are, and with that use set to increase, it may become a major issue, especially as regards public opinion about Brexit.

So this post will explain in more detail why NFEU labelling is happening, what it means, what it does not mean, and how it relates to Brexit as a whole.

Why is this happening?

There are three parts to the explanation. The first part is to do with the general way that the EU single market works, and what leaving it means for the UK. Under EU (or any) single market rules, goods are produced to a common set of standards, and each member state adopts those standards and takes necessary steps to ensure that producers within that state adhere to them. On that basis, whether produced in Berlin, Barcelona or Bologna, they can be sold without further checks or proof of compliance – in exactly the same way as applies to goods sold within GB regardless of whether they are made in Bath, Bridgend or Blair Atholl.

If a country is outside the EU, its companies can still sell their goods within the EU so long as they conform to EU standards. However, for a country outside the EU, there is no presumption that they do so, and there could be no presumption that they do so, given that such a ‘third country’ has made no commitment to adopting a common set of standards or to taking the necessary steps to ensure that its producers conform to them. Instead, exporters have to provide the relevant certifications of conformity, which are subject to checks, including possible physical border inspections – hence the import controls that the EU now applies to goods coming from GB (although the UK has yet to introduce them on imports from the EU).

In this respect, it is irrelevant that UK standards and EU standards were identical at the time of Brexit, and still largely continue to be the same, because there is no commitment from the UK to maintain and ensure identical standards. That is, the UK may actively decide to diverge by changing standards, or may passively diverge by not adopting changes in EU standards. As regards agri-food products, which are what NFEU labelling is concerned with, the EU offered the UK a ‘dynamic alignment’ of Sanitary and Phytosanitary Standards (SPS) deal, whereby the UK would commit to neither actively nor passively diverging from EU standards. This was rejected by the UK, partly on the grounds that it would compromise ‘sovereignty’, and partly because it was argued it would reduce the scope for future trade deals (especially with the US), which might entail diverging with EU SPS (even though the EU had also offered the option of a temporary dynamic alignment agreement).

So now comes the second part of the explanation of NFEU labelling. Given these circumstances, amongst others, the hard Brexit of leaving the single market (and customs union) entailed a regulatory (and customs) border between the UK and the EU. For GB the location of that border was straightforward: the coast and airports. But for NI it implied a land border with Ireland which, despite some Brexiters’ continuing denial, was politically and arguably legally impossible. This, then, became perhaps the central complexity of the Brexit Withdrawal Agreement negotiations, leading ultimately to Boris Johnson’s Northern Ireland Protocol (NIP) which created an Irish Sea border between GB and NI which became operable in January 2021.

There followed two years of complex and bitter dispute, which I won’t summarise here (but see numerous previous posts), culminating in the agreement in February 2023 of the Windsor Framework (WF), a series of measures to make the Irish Sea border smoother and less intrusive. A key provision was the creation of ‘green lanes’ through which certain products could flow from GB to NI with minimal paperwork and no routine physical checks. Enabling this is what gives rise to the NFEU labelling, to help ensure that these products do not end up being sold in the EU single market, most obviously in or via Ireland. The result, according to Northern Ireland Secretary, and enthusiastic Brexiter, Chris Heaton-Harris will be “as close to a frictionless border as we can have”.

However, this doesn’t explain why NFEU labels will also end up being required in GB shops. So this brings us to the third part of the explanation. Whilst NFEU labels in NI are required by the WF, their use in GB is not a requirement of the WF but is purely the decision of the UK government. As I discussed when that decision was announced, it was taken for what Foreign Secretary James Cleverly called “practical and philosophical reasons”. The ‘philosophical’ reason was as a sop to Brexiters and NI unionists, aimed at reassuring them that NI was not being treated differently from the rest of the UK. The ‘practical’ reason was so that businesses do not have to use different labelling according to whether their products are sold in GB or NI (this also being the probable reason why some businesses are already using the label in both).

What does it mean?

Fundamentally, the label means one thing and one thing only: the product it is on cannot legally be sold in the EU. This leads some, perhaps mainly ‘remainer’, commentators to conclude that the product does not meet EU standards. That is a false conclusion. It doesn’t necessarily mean that it does not conform to EU standards and, at the moment, in most, and probably almost all, cases it does conform to EU standards.

However, it might not meet EU standards, and that will depend on whether all three of the following conditions are met:

·         if GB has actively diverged (e.g. the government’s decision to allow the use of the neonicotinoid pesticide thiamethoxam, which is banned in the EU) or passively diverged (e.g. by not following the EU in its post-Brexit ban on the use of Titanium Dioxide as a food additive) from those standards;

AND

·         if the product in question is one to which such divergences apply;

AND

·         if the manufacturer of the product has decided not to follow the prevailing EU standard.

So the fact that a product is marked NFEU doesn’t mean that it doesn’t meet EU standards, and it doesn’t mean that it does. It just means that there is no way of knowing for sure either way.

From the EU’s perspective, that is vital information, as it means that it is definitely not for legal sale in the EU single market as it cannot be guaranteed to meet EU standards. It does the job for which it is intended under the Windsor Framework, allowing it to use the ‘green lane’. But that job is an irrelevant one for UK consumers. This is also a point which seems to cause confusion amongst some, again perhaps mainly ‘remainer’, commentators on social media, who argue that, because the product is labelled NFEU and so cannot be guaranteed to meet EU standards, it should be avoided in favour of an alternative product which is not so-labelled.

However, this misses the crucial fact that products which are not currently labelled NFEU are just as unlikely (or likely) to meet EU standards. The absence of the NFEU mark does not mean ‘this product is for sale in the EU’. All that consumers can know is that a product legally for sale in the UK meets prevailing UK standards, whether or not it is marked NFEU. They do not know whether it meets EU standards, whether or not it is marked NFEU.

What is the GB situation?

This is especially confusing in GB at the moment given that some retailers are voluntarily beginning to use NFEU labels for some products before they are legally required to. This might lead people to conclude that Retailer A’s ready meal X, marked NFEU, is less likely to meet EU standards than Retailer A’s ready meal Y, which isn’t marked NFEU. Or that Retailer A’s Shepherd’s Pie ready meal, marked NFEU, is less likely to meet EU standards than Retailer B’s Shepherd’s Pie ready meal, which isn’t marked NFEU. But none of these conclusions has any basis: to repeat, neither the presence nor the absence of the label tells people whether or not the product conforms to EU standards.

Some of this confusion may disappear once the regulations are fully rolled out, as it may well be impossible to find directly comparable products which don’t carry the mark. However, there will still be scope for similar confusions because even then it will only apply to some foodstuffs. For example, whereas fresh fruit and vegetables will have to be marked NFEU when phase 3 comes in to force, comparable tinned fruit and vegetables will be exempt. Equally, comparability aside, the full roll-out may lead consumers to think that those types of products without NFEU labels are those that still conform to EU standards. But that would be wrong. For example, breakfast cereals will not have to have NFEU marks, as they are not included within the regulations, but it won’t mean that they meet EU standards (nor will it mean that they don’t).

The issue here is that NFEU labelling is only legally necessary for those products (effectively, perishable products) which are eligible to use the ‘green lane’ from GB to NI under the Northern Ireland Retail Movement Scheme. But, even here, there is a further complexity because, judging by experience in NI so far, retailers are going to choose to mark all products as NFEU, even though they are not obliged to. The reason, I assume, is that given the complexity of the regulations, it is much easier to make sure the retailer doesn’t fall foul of them at store level by simply marking everything NFEU.

What about future divergence?

It may be that, over time, there will be greater divergence between UK and EU standards, making it more likely that the first of the three conditions, listed above, for an NFEU label meaning that the product doesn’t meet EU standards is met. Clearly many Brexiters want this. But there is always likely to be industry and consumer pressure on the government not to diverge, as illustrated this week by the report (£) of supermarkets urging the government to legislate to match forthcoming EU bans on products with links to deforestation, which will affect many foodstuffs.

Moreover, even where such pressure fails, and divergence occurs, the big producers and retailers who operate within both the UK and the EU are likely to continue to follow the EU standard, and thus the third of the conditions outlined above will not be met. So their NFEU-labelled products will continue to be more likely to still meet EU standards. Of course, to sell them in the EU, without the label, such businesses would need to obtain the necessary certifications, but they would not have to create a different product line.

By contrast, in those circumstances, domestic, often smaller, producers and retailers are more likely to make and sell goods that do not meet EU standards. That is not (necessarily) because they will actively decide to do so, but because they don’t have any reason to actively make sure that their products meet EU standards, since they are not selling them there. So their NFEU-labelled products will become less likely to still meet EU standards.

But it will still be the case that there is no way of knowing if an NFEU-labelled product meets EU standards or not, and no way of knowing whether one not marked NFEU meets EU standards or not. This remains the case even if there is massive future UK divergence from EU standards. Consumers won’t avoid that by avoiding NFEU labelled products, because it will be equally true of products which are not marked NFEU. As and when UK standards change, any product sold in the UK will potentially not meet EU standards, whether or not it bears the NFEU label, and may still do so, whether or not it bears the NFEU label.

It is worth adding that this entire issue may be overtaken by events. If there is a Labour government, and if, as Labour have consistently implied, but not quite said, that government seeks and secures* an SPS dynamic alignment deal with the EU then, as I understand it (I stress this because there are so many complexities and unknowns), the entire need for NFEU labels would disappear.

Confusion abounds

The deep origins of this expensive and confusing mess lie in multiple confusions on the part of Brexiters. One of the most infamous phrases in the Brexit process was Liam Fox’s suggestion, made in 2017 when he was International Trade Secretary, that ‘this should be the easiest trade deal in history’. Most people who remember it probably think it was akin to similar hubristic claims, such as Michael Gove’s ‘we will hold all the cards’. In fact, it grew out of the belief by supposedly more ‘sophisticated’ Brexiters that the fact of existing regulatory alignment between the UK and the EU would mean that a trade deal could be struck that would effectively replicate single market membership, including the absence of many non-tariff barriers (i.e. including regulatory and standards divergence).

As I discussed at the time of Fox’s comment, it was nonsense, and it has never really gone away. Some Brexiters, lamentably including David Frost during the Brexit trade negotiations, simply can’t seem to understand that the issue isn’t just about the actual standards of products, it is about being part of the systems that certify, register, and uphold those standards. Ironically, it is this same lack of understanding which creates confusion amongst those assuming that the NFEU label necessarily means that the product doesn’t meet EU standards.

Perhaps more importantly, the confusion, or something like it, seems to inform current Labour policy. Leaving aside SPS, where, as noted, that policy is most likely one of dynamic alignment, Labour seem to think that continued regulatory alignment in general is a way of solving the problems of Brexit. If so, that is only half-true. It is true that maintaining alignment with the EU (not as part of a specific agreement, but simply by unilateral UK shadowing of EU regulations and standards) will make life easier for British businesses and other organizations, to the extent that it does not force them to produce to two sets of rules. Though, even then, the benefit may not be huge since, as noted above, in practice many firms will simply follow EU rules – the case of arsenic levels in baby food being one recent example. However, more fundamentally, alignment in itself does not enable UK products to be sold freely in the EU because, to repeat, it’s not just about the standards, it’s about being part of the systems around the standards.

The other deep root of the NFEU situation, of course, is the Brexiters’ persistent refusal, going back to before the referendum, to understand or to be honest about the implications of Northern Ireland for (hard) Brexit, and vice versa. That is what ultimately led to the Windsor Framework and NFEU labelling, and also, indirectly, to the government decision to sweeten the pill for unionists by rolling out that labelling across in GB as well as NI, even though it didn’t have to and, anyway, the unionists are not impressed by it.

Against this background, British consumers can hardly be blamed if they, in turn, are confused by the labelling, and falsely, but quite understandably, take it to be a mark of inferior produce. It’s easy to see how ‘Not for EU’ will become interpreted as ‘not for you’. If that leads to public consternation, and deepens the unpopularity of Brexit, then it will be an irony the Brexiters richly deserve. They have endlessly deceived themselves and the public by treating hugely complex issues of international trade and supply chains in highly simplistic and deeply misleading ways, and they have also endlessly demanded that the UK diverge from EU standards.

So If the public are now misled by the NFEU labels, which arise from this complexity, and simplistically take them to mean that Brexit has made the food they buy unsafe, then the Brexiters will have no one to blame but themselves.

 

 
*It is an important question as to whether the EU would now agree to such a deal. It’s true, as noted earlier, that this was offered to the UK, but that was in April 2021 in the context of the unresolved NIP disputes. That may not still hold good post-Windsor Framework, which the EU may well regard as having settled matters to its satisfaction. It is certainly the case that Labour will not secure an SPS deal if, as some statements have suggested, it has in mind a ‘New Zealand-style’ equivalence regime – which has already been proposed by the UK and rejected by the EU. The difference between ‘dynamic alignment of regulation’ and ‘regulatory equivalence’ is, again, a very complex issue, as explained by a House of Commons Library research briefing.

Note: I’m not 100% sure yet, but I don’t think there will be a post next week.

Denial deepens (Great) Britain's Brexit crisis

As the Brexit-related national crisis discussed in my previous post continues, including ongoing petrol shortages at garages, Brexiters are undecided as to what to make of it. Their boilerplate argument is that the crisis is nothing to do with Brexit, but something affecting countries around the globe including EU members, although this flies in the face of the evidence of how the single market gives logistics firms the flexibility to avoid shortages (£) and, hence, the lack of empty shelves and petrol queues.

Yet arch-Brexiter Allister Heath, Editor of the Sunday Telegraph, claims that “the Brexit-hating global elite is watching Britain’s chaos with glee” (£), which would hardly be possible if that chaos was not specific to Britain and related to Brexit, although Heath seems to be unclear whether it is or not. To be charitable, this contradiction might be explained by his claim that Britain is being “held to a higher standard” because of having had the temerity to defy global bureaucrats by becoming a self-governing country (sic). But, if so, that contradicts the longstanding Brexiter claim that such self-government is the global norm. Nor does it sit easily with all the breathless talk of ‘Global Britain’. But perhaps all this is to look for logic where none exists.

One way that, to the extent it is acknowledged by Brexiters at all, they explain the distinctively deep nature of Britain’s crisis is in terms of ‘panic buying’ as the cause, including the suggestion that it would not have occurred but for media reporting of minor shortages of petrol. Such is the diagnosis of ERG ‘Spartan’ MP Andrew Bridgen, based on the somewhat underwhelming evidence that it is what is said by “friends of mine” – a club to which it is hard to imagine a jostling queue for entry.

This doesn’t quite fit with the Brexiter stereotype of how stoical, unflappable Brits differ from their emotional and ungovernable continental neighbours, but it’s a truism that people won’t panic buy if they don’t know there is anything to panic about. However, it is ultimately absurd unless we want a media which does not report any shortages unless they are so widespread as to be calamitous, and also imagine that, especially in an age of social media, people won’t learn of them by word of mouth anyway.

In any case, it doesn’t tell anything like the whole story about why panic buying is happening in Brexit Britain.

Brexit-specific reasons for ‘panic buying’

Panic buying is well-known in many social sciences as a stock illustration of ‘the (collective) irrationality of (individual) rationality’, because for individuals hearing of actual or predicted shortages it is rational to buy, and yet the collective effect of them doing so is irrational in making the shortage worse or the prediction self-fulfilling. In that sense, this latest example is no different to many that have happened before. But it has two other features which are more or less related to Brexit, and therefore we can expect it, if not in relation to petrol then something else, to recur.

Brexit and trust

The first is that for several reasons, not all related to Brexit, public trust in what the government says is very low and so its messages of reassurance are likely to be ignored. Boris Johnson is perhaps a uniquely dishonest Prime Minister and, curiously, that is understood quite as much by those who support him – to some of whom it is actually part of his appeal – as those who do not. He sets the tone for a government which is cavalier with the truth and also more than usually addicted to performative symbols rather than substance and competence, and to campaigning rather than governing. That leadership and general tone are very much characteristic of Brexit and are some of the general threads that link the Vote Leave campaign to this Brexit government.

More specifically, this is a government explicitly constructed on the basis that Brexit, if even mentioned, must never be criticised. The refusal until this week of Transport Secretary Grant Shapps to even acknowledge that Brexit is a factor in the fuel crisis is all of a piece with this, as is the ongoing refusal of other ministers to do so. Even more so was the attempt through anonymous ministerial briefings to blame the situation on “diehard remainers”. Thus the public, the majority of whom had already made the connection with Brexit, might sensibly conclude that the government would be minded to suppress any bad news which was associated with it and to use it as an excuse for yet more culture warfare against remainers. This, of course, is just part of the wider Brexiter attempt, mentioned above, to deny the role of Brexit in the supply crisis in the face of numerous objective reports to the contrary in the international media, the denial as much as the crisis itself being what is making the UK a laughing stock abroad.

The reality of post-Brexit fears

The second feature is a deeper one. If people believe that, generally, supply chains are fragile and liable to fracture then they are right to do so. That has become much more so in recent decades with the rise of extended transnational supply chains and of the use of just-in-time management techniques throughout them. There are arguments, not just on nationalistic grounds but on those of security, sustainability and environmentalism against those developments. Nevertheless, they have occurred, and unwinding them would entail costs, both in the prices and the ready availability of a massive array of goods, including locally out-of-season or ungrowable produce.

For example, overall about half of the UK’s fresh fruit and vegetables are imported from the EU, with sharp seasonal variations so that, for example, 90% of lettuces consumed in the UK in January come from the EU. For most such produce (some fruits are an exception) almost all of what is imported comes from the EU where it is not domestically sourced – distance matters for trade in general, but especially so for perishable goods - and for the most part it arrives on refrigerated HGVs via roll-on, roll-off ferries. As such, it is highly vulnerable to any delays or difficulties in transportation, both of which have been made more likely by Brexit and will become even more so if ever the UK becomes ready to apply full import controls.

If changing this way of organizing the economy was what people had wanted to do, it would have been a massive undertaking, but it would not have needed Brexit. As with the case of rewards and conditions for HGV drivers, discussed by Sarah O’Connor in the Financial Times (£) this week, or of those for workers in general, we could – and many would say should – have done it anyway. Crucially, Brexit was never proposed as something which had this motivation or would have these effects. On the contrary, any suggestion it would do so, even to a much lesser extent than has in fact now happened, was shouted down as Project Fear.

So, with almost no discussion and very little time for preparation, Brexit dropped an enormous rock into what were already complex, fragile and highly calibrated mechanisms of domestic and international supply chains, making them even more fragile. Thus for this reason, too, the public are wise to be, as it were, on a hair-trigger to panic buy because if those supply chains collapse things that we have taken for granted for decades will fall apart, and things can get very nasty indeed. As we have seen this week, the consequences are not just a shortage of ‘avocados in Waitrose’, as prolier than thou Brexiters sneer, but can very quickly include funerals cancelled and old people left alone and soaking in urine because their carers can’t get the fuel to reach them.

Recurrent crises are likely

Given these things, we can expect the coming months, if not longer, to be characterised by intermittent recurrences of supply crises and panic buying, whether over particular goods or more generally. Even without that, we can expect continued price rises to the extent that the additional costs of trade created by Brexit are passed on from companies to consumers, as well as because of the rising cost of energy. Business groups are now warning of an ‘autumn storm’ of shortages and escalating costs (£).

The exact shape and extent of this is impossible to predict because what is going on is not so much an experiment – which would imply some deliberate and carefully managed process – but a blindfolded exploration of what happens to a country which is highly integrated into the international economy when it becomes less integrated, or integrated on different and largely unknown terms. Indeed, it is for that reason that currency markets are now treating sterling as if Britain were a developing country,

Apart from some of the more eccentric Brexiters, such as John Redwood, there is little appetite, and in any case no possibility, of the UK becoming a largely self-sufficient economy. So the most likely outcome is that richer people will be able to meet these rising costs and to preserve stockpiles against supply disruptions (the reason petrol is such a politically potent case is because stockpiling is very difficult). Going out to a restaurant, say, will become a bit more of a rare treat and a bit less of an everyday experience. People will have to get used to waiting for, say, new kitchen installations until the parts and labour are available. Some of these are ‘first world’ problems, perhaps, but the Brexiters never suggested that leaving the EU would mean ceasing to be such a country.

What about the workers?

As regards the labour shortages, there may well be wage increases though that is not yet clear, and if so rising prices may cancel them out. There is now an increasingly common expectation (£) that we will see the return of ‘stagflation’ – inflation with no economic growth. At all events, the government’s reaction to the HGV driver crisis shows what its approach to labour shortages is going to be. Obviously a few temporary work visas are going to have almost no effect, and whilst ‘deploying the army’ may give a certain sort of Brexiter moist feelings of excitement where none should be, it isn’t a sustainable solution either. More generally, the Home Office continues to refuse industry pleas to add the numerous occupations facing a recruitment crisis to the Shortage Occupation List, just as it did last year when all 70 of the occupations the Migration Advisory Committee recommended adding to the list were rejected.

Instead, the government (though not, perhaps, Johnson himself) continues to believe in the Brexiter shibboleth that domestic labour is sufficient for the economy’s needs, notwithstanding the fiasco of the now abandoned ‘Pick for Britain’ scheme and despite, as David Smith of The Times acutely explains, the absence of anything resembling a coherent labour and employment policy (£).

So, apart from simply ‘leaving it to the market’, there is likely to be a renewed push to make the unemployed – no matter for what reason, be it caring for relatives, precarious health or even irredeemable unemployability – work, and for people to work to a later age. Already we have seen suggestions that prisoners be used to work in the meat industry, and this week Justice Secretary Dominic Raab opined that they could undertake a range of jobs, including HGV driving. It can only be hoped that such novice truckers will be more skilled than the van driver who ran into the back of Nigel Farage whilst vainly searching for petrol this week.

It won’t be a pretty sight to see people, metaphorically speaking, flogged, into the fields but it is the logical corollary of the Brexiter belief, much on display in the fuel crisis, that the UK’s labour needs can and should be met by British workers.  It will be especially distressing for Lexiters to see where their naivety has led, but delightful for Tory Brexiters like Raab, Patel and Kwarteng who have long denounced the idleness of the British.

The latter doesn’t, by the way, mean that ‘this was always the plan’, as is so commonly and so tediously claimed on social media about each and every development in the Brexit saga. Anyone who still thinks there was ever ‘a’ plan for Brexit really hasn’t been paying attention over the last few years, or credits the bumbling, incoherent public face of Brexit – the Helmers and the Habibs, the Redwoods and the Rees-Moggs, the Bridgens and the Bones – with a hidden competence that flatters them considerably beyond what objective reason, or even the most generous charity, suggests is warranted.

The Northern Ireland difference

There is a very bizarre contrast between the government’s approach to Brexit in general and to the Northern Ireland Protocol (NIP) in particular. The general approach is to insist that Brexit is having no adverse effects, despite the supply crisis, and that nothing about it is up for discussion, still less change. Yet the NIP, which is in many respects protecting Northern Ireland from Brexit problems, including that of fuel shortages, is treated as an unworkable disaster which must be completely renegotiated. Relatedly, whilst playing down or rejecting any suggestions that the new Brexit barriers are impinging on EU-GB trade, those same barriers are represented as devastating for NI-GB trade.

If there is a sense to be made of it, it may lie in the lingering unionism of the Tory Party and within that guilt about Johnson’s abandonment of Northern Ireland’s unionists in order to ‘get Brexit done’ and perhaps even fear that it will augment the boost to Scottish independence that Brexit has in any case provided. Be that as it may, what has been created by Johnson’s Brexit is something akin to a controlled trial in which the effects of hard Brexit in Great Britain can be compared with the effects of the (relatively) softer Brexit in Northern Ireland. The emergent differences in these effects are very clearly chronicled by Professor Gerhard Schnyder on the Encompass website.

All this might be taken to bolster my recent suggestion that David Frost’s ‘Betamax’ approach to the NIP makes the time ripe for it (and him) to be jettisoned, not least since layering a political crisis with the EU on top of the economic crisis seems foolish for a government that claims to have got Brexit done. But the contrary possibility, outlined by, amongst others, Baroness Jenny Chapman who leads on Brexit for Labour in the House of Lords, is that Johnson and Frost will escalate the NIP row into such a crisis by following through on their threat to invoke Article 16 in order to distract from the economic crisis.

If so, it would be deeply irresponsible, and designed solely to whip up the support of the Tories’ leave-voting base and the Brexiter press. That is hardly likely to deter Johnson if he calculates it would be an advantage, but I continue to think it would be a miscalculation. The latest polls show a very sharp change in public opinion over the summer about whether Brexit has been going well (18%, down from 25% in June) or going badly (53%, up from 38% in June) since the end of the transition period. The core leave vote might well see escalating conflict with the EU as a sign of Brexit going well, but that’s unlikely to be so for most voters, including many Tory voters. Indeed it is amongst leave and Tory voters that the sharpest falls in thinking Brexit is going well are to be found.

The first Brexit winter approaches …

How the government proceeds over the NIP will become clear in the next few weeks, and how that plays out will depend on many factors, including the EU’s reaction. Crucially, what matters is whether the supply crisis continues or even deepens in the run-up to Christmas as is being warned of, as well as what happens with the Covid pandemic, which is far from over. Nor should it be forgotten that although the Brexit saga seems to have been dragging on forever, we are still only in the first few months of actually living with Brexit, and there are key elements, such as import controls, which haven’t yet been implemented. A baby conceived as the transition period ended is still only the tiniest of infants.

Yet, having dreamt of Brexit for so long, and having promised so much for it, Brexiters already want it treated as ancient history and Johnson is positively bored with it. As Treasury Minister and long-term Brexiter Simon Clarke put it this week when asked about how Brexit related to driver shortages, even to raise the question is apparently to “take us back into a negative conversation”. But enacting a massive change to the entire direction of the country on the back of a tiny, and fleeting, majority, and in the face of deep hostility from a substantial minority, whose concerns were not just ignored but jeered and sneered at, was never going to work like that.

At the very least, the onus was on the Brexiters to show that they could make their project a success. As we approach the first winter of Brexit reality, it is telling that not only is no such success in evidence or in prospect but that they don’t even want to talk about it anymore. Perhaps that at least shows a degree of political sense, if not any contrition.

What is far more surprising is that, despite the opportunities it presents for Labour, discussed in my previous post, and despite the fact that a miniscule 3% of Labour voters think Brexit is going well and a whopping 81% think it is going badly, Keir Starmer’s party remains almost equally unwilling to do so (£). I suppose they don’t want to threaten the commanding lead in the opinion polls that their policy of Brexit reticence has bestowed them. Oh, hang on …

This crisis could be an opportunity

It’s impossible to escape the fact that Britain is now caught in an escalating crisis. It has multiple moving parts which interact in complex ways, but each of them is to a greater or lesser extent linked to Brexit. Daily, the dishonest promises made for Brexit and the reckless irresponsibility with which it was implemented are being exposed by this crisis. But it is made worse by a new layer of dishonesty and irresponsibility which seeks to deny that the crisis is anything to do with Brexit at all, or to pretend that those pointing out that Brexit is one factor are claiming it is the only factor. As always with Brexit, unpicking the claims and counter-claims of Brexiters is difficult because they conflate different issues and set endless false hares running. So it’s worth very briefly setting out what is happening and why.

The crisis in brief

Central to the crisis are the supply chain disruptions which have been going on for months (see numerous previous posts), and which, crucially, have now caused petrol shortages. Here Brexit is one important cause because it contributes to labour shortages, including of HGV drivers. We now also have an energy crisis. This has multiple and complex causes, although Brexit is not currently a significant one because the Trade and Cooperation Agreement (TCA) meant that large parts of existing arrangements were, in effect, unaffected. Even so, it is not entirely irrelevant because the UK did leave the Internal Energy Market. This has created more cumbersome trading processes, leading to increased costs for gas and electricity supplied via EU-UK interconnectors and, potentially, prioritisation of supplies to EU countries.

One knock-on effect of the energy crisis is the shortage of CO2 for food production and packaging, which threatened to cause even greater and very immediate supply disruptions when the two main UK plants ceased production until the government provided them with some financial support. Although it is little-remarked on, there is a Brexit factor here because the main alternative source, a Dutch plant, is prioritising EU clients. Moreover, although there is some lack of clarity about this, it seems as if Northern Ireland, by virtue of still effectively being in the EU goods single market, has escaped the CO2 shortage, and, certainly, it also has different arrangements to the rest of the UK as regards energy links with the EU because of the ‘all island’ system.

Whilst it is food, fuel and energy which are most in the headlines, there is a more diffuse sense of national crisis. Many goods other than food – for example construction materials - are in short supply, the NHS continues to struggle, with dental services, in particular, close to impossible to obtain in some areas, and social care is at or beyond breaking point. Shortage of staff caused by ending freedom of movement is again one central factor, and perhaps now the central factor, in this.

Certainly in all of these fields it is becoming more difficult to blame the pandemic and, as the former boss of Sainsbury’s said recently, in the long run Brexit will have a bigger effect on the food industry than Covid. In any case, to the extent that it is true that the pandemic meant that the Brexit damage arrived at the very worst of times, all that does is to underscore the government’s reckless refusal to extend the transition period when it had the chance. As Dr John Cotter has recently argued on the Encompass website, this was a result of “hard Brexit ideology” trumping pragmatism, with the consequences we are now suffering.

The need for realism and honesty about Brexit

All of this, along with the ongoing damage to UK-EU trade due to the new trade barriers, is very much in line with what Brexiters were warned would happen, and if anything rather worse. Their persistent dismissal of these warnings as Project Fear was successful in getting them their Brexit, but with that success comes responsibility: Brexiters own what is happening to our country. This is not about saying ‘we told you so’, in an attempt to refight the battles of 2016. It is about finally being honest and realistic about Brexit.

Ironically, the current dishonest attempts by Brexiters to claim that the crisis is nothing at all to do with Brexit may aid that. They themselves now admit that the way remainers kept scratching at the ‘£350 Million a week for the NHS claim’ in 2016 actually helped them keep the public debate focussed on that (spurious) claim. Now, their insistence on trying to discredit Brexit as a cause of the crisis helps to keep that (correct) claim in the headlines. Latest polling evidence suggests that a substantial majority of the public (68%) and, even, a small majority (52%) of leave voters think Brexit is partly to blame for the petrol shortages. So, perhaps, reality will win out.

At the very least, the words of Business Secretary Kwasi Kwarteng that “we’ve moved on” from Brexit ring very hollow indeed when Brexit is intertwined with almost every aspect of the crisis. They also make little sense considering the government’s own decisions. Almost lost amidst all the other news was the announcement that, as predicted in my previous post, the UK will again postpone the introduction of import controls on EU goods. Whilst expected, it is a shocking indictment of governmental unpreparedness for Brexit and, even accepting that the slogan referred primarily to immigration, makes a mockery of ‘taking back control of our borders’.

It leaves the UK with perhaps the most bizarrely skewed trading relationship with the EU imaginable and, incredibly, this was defended by Tory MP George Freeman as Britain “acting very fairly” by continuing with “free trade” unlike the “aggressive” EU. It seems that five years on UK politicians still don’t understand what (hard) Brexit actually means. The wider point, though, is that we can hardly have “moved on” from Brexit when it still hasn’t been fully implemented.

Government stuck between admitting and denying reality

The import control decision makes sense in terms of avoiding adding another dimension to the crisis, and is an implicit acknowledgment that the more Brexit is implemented the more damaging it becomes, even if offering only a very limited and temporary postponement. The same applies in relation to immigration where, again, the government response to the crisis is stuck between admitting and denying reality by reluctantly agreeing to 5000 temporary visas for HGV drivers and 5500 for poultry workers whilst at the same time lashing out at it for being a “manufactured crisis” got up by “diehard remainers”.

At one level, this half-accepts that, in ending freedom of movement, Brexit is a cause of the crisis. It also implicitly accepts that the Brexiter idea that domestic labour could substitute for EU labour was false. But as a response it is woefully inadequate. The numbers are too small compared with the shortages, and anyway the UK is no longer an attractive destination for EU workers in general and drivers in particular (though the visas could also be used by non-EU workers).

There are multiple reasons for that, including Brexit itself which was so bound up with a derogatory attitude to EU workers, and the chaotic end to the transition period which saw truck drivers stranded in the UK, causing widespread anger not helped by subsequent treatment of EU drivers seeking to work in the UK. Beyond that, three-month visas are very unattractive, and, from October, the end of recognition of EU ID cards by the UK means that even to use such visas will require obtaining a passport. In any case, even in its own terms any effect it does have isn’t going to be immediate.

The bigger point is that, as is widely understood in EU countries but was never really grasped by the UK, there are fundamental differences between migration and freedom of movement of people – differences both in the ease with which it can be done and in the cultural and psychological meaning and experience associated with it. Thus the benefits of freedom of movement can never be replicated by issuing work visas, as if turning an economic tap on and off, the more so after years of very publicly denouncing foreigners for ‘taking our jobs’.

This is one example of why what is at issue is not just the arguments of 2016 but what happens now and in the future. Rather, the two are linked. The Brexiters simply didn’t understand the consequences of what they advocated and, as a result, are incapable of responding adequately to the problems they have created. That has been made all the worse by Johnson’s approach to Brexit as something to be ‘got done’ and his having made membership of his government dependent, above all else, on not even questioning how it was and is being done. Equally, Johnson is determined to avoid any reference to the promises he made for Brexit.

Thus whilst it is true that gas price rises have relatively little to do with Brexit, it shouldn’t be forgotten that he promised that Brexit would lead to lower prices. Similarly, having for so long made a trade deal with the US a central plank of Brexit, he now, almost casually, accepts that it isn’t going to happen. At the same time, trivial ‘benefits’ of Brexit, such as crown marks on pint glasses, are trumpeted by the Brexiter press as some huge national victory, whilst new false claims for its benefits, such as that it allowed the UK to be part of the US-Australia nuclear submarine deal or that it will enable all sorts of regulatory reforms or the briefly floated absurdity that the UK might join USCMA (NAFTA as was), are advanced as sops to the gullible. And if that sounds like derogatory elitism it is: but it is the derogatory elitism of Johnson and his cronies smirking at the ghastly oiks they so despise.

The battle between remembering and forgetting  

As I’ve remarked before, at least since Johnson came to power we have entered a period in which there is a battle between remembering and forgetting, in which the endless gaslighting by Brexiters within and outside government makes remembering – that is, remembering what was promised but also how we got to where we are – almost impossible.

Coming back from what has only been a two week break from posting I’m struck by how difficult it is to keep track of all the Brexit-related things which have happened just in that short period, and of the underlying complexities of how and why they happened. Each issue to which I have devoted a couple of sentences here could easily be the subject of an entire post or more. That is irritating in itself (for me, and perhaps for readers), and it is the reason why I’ve changed my intention to keep to the normal pattern of posting on a Friday, because had I done so it would have been even harder to keep up to date. But I think it points to a wider and very important fact.

Most of the general public have, reasonably and understandably, not followed each twist and turn of Brexit. When it most dominated the news in 2019, many people probably got heartily sick of it, which was part of the appeal of Johnson’s dishonest ‘get Brexit done’ message. Since then, especially because of the pandemic, and because of the slow puncture nature of Brexit, even more will have tuned out.

Suddenly, that has the potential to change because of this complex crisis which, so to speak, is resulting in a much more rapid loss of air. The near political silence about Brexit that has obtained since, at least, the end of the transition period looks increasingly untenable. As Jonathan Freedland writes in the Guardian, Brexit needs to be ‘named’ in order for its role as the thread running through the crisis to be addressed.

The crisis may prompt a renewed Brexit debate

That is beginning to happen as media reports increasingly discuss Brexit in relation to the crisis – aided, as I’ve suggested, by Brexiters’ ever noisier attempts to deny that Brexit has any role in it at all – but as it does so those who haven’t been much engaged with Brexit will face my ‘catch up’ problem but on a far bigger scale. How can it be that Brexit, which promised so much for so long, has come to this? Wasn’t Brexit finished with months ago? These questions will intensify if the crisis deepens, which is likely given that colder weather will increase energy demands, and that demand for EU fresh produce will rise in winter, especially as the government response so far is so feeble.

The answers will determine who the public blame, and how they react, and this will matter hugely for the future. Because, to re-iterate, the issue isn’t primarily about who had the right of it in past arguments but about what happens now and in the future to UK-EU relations. For example, the already implicit recognition from the government that ending freedom of movement has contributed to the fuel supply crisis opens the door to an explicit recognition that it is a disaster across numerous other areas. That in turn could pave the way to, at least, reversing the government’s decision to refuse the EU offer of a mobility chapter in the TCA and, at most, to undermining one of the Brexiters’ central objections to single market membership. In a similar way, albeit with less immediate urgency, as the promises made for the benefits of leaving the customs union in terms of, especially, a US trade deal evaporate, whilst its costs to EU trade rack up, then the central case for that part of Brexit, too, erodes.

For it’s vital to recall that, despite claims to the contrary from some Brexiters since, Brexit was not sold to leave voters in terms of ‘sovereignty’ at any cost. They were promised that, at the very least, it had no costs and that, actually, it would mean lower prices, better public services, more trade, and more prosperity. There would be no crisis to be ‘survived’. And this is not some long-gone history – it was only a shade over the normal length of a government’s term in office. So although neither hard core Brexiters nor their hard core followers amongst leave voters will ever have a change of heart, whatever happens, it needs only a fairly small number of leave voters to recognize the grotesque fraud that was perpetrated upon them for post-Brexit politics to change quite dramatically.

That, of course, is why the Brexiters are so determined to deny the crisis is in any way caused by Brexit and, hence, why the government’s attempts to deal with the crisis are so limited and ineffective. It is also why, as I’ve argued so many times before – but it is now truer than ever – the Labour Party has a golden opportunity to hammer the government on Brexit.

For many of those potentially disenchanted leave voters will very likely have been traditional Labour voters, to whom Labour can now say without disrespecting them that Johnson has not delivered what he promised. In the process, the majority of habitual Labour voters who backed remain – and indeed remain voters in general, who have been treated with such contempt for the last five years - would, finally, have their concerns acknowledged. Beyond these electoral considerations, such an approach is the only way of being realistic about the reasons for and solutions to the growing crisis. The only way, in fact, of facing up to the realities of Britain’s entire economic and political situation, both in terms of the specific effects of Brexit itself and some of the chronic pre-Brexit problems which Brexit has rendered acute.

Rarely have political opportunism and principle been so closely aligned, if only Starmer would grab the moment, and in fact there are signs that he is finally starting to do so.

And then there’s Northern Ireland

Buzzing away in the background (and of which, no doubt, more next time) to all this is the row over the Northern Ireland Protocol (NIP), and since my previous post David Frost has continued to make aggressive noises about this. His doing so again gives the lie to Kwarteng and others’ claim that “we’ve moved on” from Brexit: for how can that be if Frost is still trying to renegotiate it? But what I argued in that previous post is now even more true given the intensified crisis of the last couple of weeks: the public may be very unforgiving indeed of continued aggravation over the NIP on top of everything else and, indeed, will be reminded anew of Johnson’s false promise to have got Brexit done.

Indeed some may reflect that it is strange for the government to be so agitated about Northern Ireland when its version of Brexit avoids some of the problems experienced by the mainland. They might even wonder why, instead, the benefits of the NIP should not be extended to include Great Britain. After all, even if it doesn’t quite have the ‘best of both worlds’ as Michael Gove put it, it seems to have some distinct advantages over complete exit. From that it is just a very short step to asking why on earth we undertook Brexit in the first place, a question which is becoming even harder to answer with each passing day.

A depressing anniversary

It’s now exactly five years since I started this blog and, as it enters its sixth year, with a pleasing symmetry, it will today have its six millionth visit. I must admit that I didn’t really anticipate when I started that I'd still be writing it now, over 300 posts and about a million words later, or that it would settle into a kind of weekly newsletter. I most certainly hadn’t imagined that it would become so widely read. I’m enormously grateful to everyone who has read it or in some way shared or recommended it to others.

Looking back at the very first post there are several things in it which I’d express slightly differently (unlike a certain more famous blogger, I don’t retrospectively change old posts) but, on the whole, it has held up fairly well, and these lines, in particular, now seem almost prophetic:

“Over a whole swathe of issues (the leaving process, the nature of the single market, the way that the WTO and trade deals work etc.) the Brexit position is composed of, at best, half-truths or just outright fantasies. It is therefore inevitable that the coming months and years will see a series of collisions between these fantasies and the realities (and equally inevitable that Brexiters will blame this on others).”

Here we are, five years later, and exactly this dynamic continues to play out though, given that Britain has now left the EU, in ever more bizarre ways.

The concrete impacts of being outside the single market and customs union in terms of damage to trade, supply chain disruption and labour shortages are, as discussed in last week’s post, becoming harder to ignore. But as also noted in that post, though only in passing, this is provoking contradictory responses from Brexiters.

Initially, they argued that these impacts were just a remainer invention. That has become untenable as the shortages continue to grow, affecting everything from school meals to the profound and deepening social care crisis, threatening the ‘cancellation’ of Christmas and even, to the amusement of some, shortages of some beers in arch-Brexiter Tim Martin’s Wetherspoon’s pubs. Meanwhile, the latest trade figures show what the Food and Drink Federation call a “disastrous” decline of food and drink exports to the EU since the end of the transition, with meat and dairy products especially hard hit.

In the face of this, there is now a split between those arguing that the shortages and/or trade declines are essentially nothing to do with Brexit, and that to say otherwise is remainer propaganda, and those admitting they are very much to do with Brexit, but claiming that this is the fault of the EU.

It’s not Brexit!

The first of these is a continuation of the tired old Project Fear line that has served Brexiters so well both before and since the referendum. It is achieved by the familiar sleight of hand of exaggerating warnings (or, now, reports) of Brexit damage so as to create an absurd and easily-demolished straw man. The current straw man is that the shortages are entirely caused by Brexit.

Thus former Brexit Party MEP Ann Widdecombe scoffs that “you cannot put the absence of food on the shelves solely down to Brexit” and thus, supposedly, “clinically crushes attempts to blame Brexit for the UK supply chain crisis”. At the more intellectual end of the spectrum, the pro-Brexit former Chief Economist at the Institute of Economic Affairs, Julian Jessop, points, rightly, to global issues, including the pandemic, as a major cause of the supply shortages with Brexit as “an additional factor”. Thus remainers are wrong “to have seized on the ongoing disruptions to supply chains as proof that ‘Project Fear’ was right all along”.

The first difficulty with such arguments is that, so far as I am aware, there are no serious or reputable claims that all the shortages are “solely” or even mainly caused by Brexit. There may well be people posting on social media saying it, just as such postings can be found making just about any claim, but basing counter-arguments on that is, precisely, to erect a straw man.  ‘Mainstream media’ reporting invariably says Brexit is only one cause and, if anything, tends to downplay its role. I said the same thing last week, whilst making the point that it is also the factor which is unique to Britain and, uniquely, chosen by Britain.

The other difficulty, most evident in Widdecombe’s case, is the slippage from correctly saying the shortages are not solely or mainly due to Brexit to at least implying that they are nothing to do with Brexit. That is both incorrect in itself, but also misses the way that, even without being the main factor overall, Brexit inflects the shortages in the UK in particular ways for particular products. Thus whilst Brexit is almost certainly not a factor in shortages of, for example, semiconductors, and only one of the factors in, for example, the shortage of timber – both of which can be seen globally, and affect the UK in a way similar to other countries – it is almost certainly the major factor in shortages of fresh produce.

This is because of the nature of UK supply chains which are heavily reliant on EU produce, and the specific way Brexit impacts on cabotage rules (where and how often a haulier can load/ unload goods). For these and other Brexit-related reasons (e.g. shortage of labour to pick UK produce) we see widespread shortages of fresh produce in UK shops but not in EU shops. Again it’s not an all or nothing explanation – there are some produce shortages in the US, for example – but the point is that whereas Brexit is low to non-existent on the list of causes in the case of semiconductors it is high on the list for fruit and vegetables.

Of course such shortages have a particular significance in that they impinge directly on the general public. So the ‘denialists’ have important reasons to discredit or downplay Brexit as a cause of such shortages. One is simply a psychological investment in Brexit as an unalloyed good. That presumably explains the contradiction that at the same time as disowning the shortages, some Brexiters are hailing rising wages as a Brexit benefit – a dubious claim in itself, but bizarre when, for it to be true, the shortages would have to be caused by Brexit. But more importantly it is political. There is a battle underway to control the narrative of what the shortages mean because if they come to be associated in the public mind with Brexit then that will do much to discredit the entire project.

The stakes in that battle are likely to increase because the shortages are likely to intensify assuming UK import controls are introduced over the coming months, and will do so in any case to the extent that UK demand for EU fruit and vegetables always peaks in the winter. It is also likely that food prices will rise (£). This battle to control the narrative has been underway since the end of the transition period, and so far it has been fairly easy to blame disruptions on the pandemic. As that wanes in credibility, and to the extent that simple denial is implausible, so too do Brexiters switch the emphasis to blaming others for Brexit damage.

It is Brexit (but it’s not our fault)!

Hence last weekend’s Mail on Sunday carried an editorial with a striking headline: “Let’s unite with the EU to crush the curse of border bureaucracy”. This attracted much ribald comment since, at first blush, it sounded like a call to re-join the EU. Needless to say it was no such thing. Instead, acknowledging the reality of border checks and delays, it was a roll out of almost all the fantasies the Brexiters have nurtured for so long. In particular, it revived the idea (without using the word) that there could be still be something close to frictionless trade despite having left the single market and customs union. The familiar suggestion is that this could be achieved by a mixture of new border technology and accepting UK product standards as ‘equivalent’ to the EU’s because they haven’t, in fact or as yet, changed very much from those of the EU.

At heart, this represents a complete refusal to accept the consequences of hard Brexit, embodying the persistent ideas that none of the things Brexiters like need to change as a result and/or that the UK should have a special status different to other third countries. In some discussions of the article it was suggested that this should indeed be possible because not all third country-EU relationships are identical. But whilst that is true (recall, for example, the Barnier staircase), it is only true within a restricted range of possibilities. It certainly doesn’t mean that the EU could simply grant the UK the benefits of a regulatory union (i.e. the single market) and a customs union without the UK being bound by their conditions and constraints.

Fundamentally, the article shows a continuing and total misunderstanding that it is the single market and customs union which abolished the red tape which, with Brexit, the UK has re-instated for itself. The complaints about that, in turn, reprise the peculiar way that Brexiters talk as if Brexit had been done to the UK, in this case by the EU raising trade barriers, rather than chosen by the UK. Existing regulatory alignment is irrelevant to this because the UK refuses to relinquish the right to diverge, or to accept external enforcement, on grounds of sovereignty. That is its choice, but it brings consequences. Similarly, whilst the MoS bemoans that “we are supposed to impose our own tiresome and self-harming restrictions on goods coming into the UK from the EU” (i.e. import controls) it refuses to understand that ‘tiresome and self-harming restrictions” are what the UK chose for itself in enacting hard Brexit.

Rather than accept these basic facts, the article and its defenders ascribe Brexit’s failure to the EU’s inflexibility and its supposedly ‘political’ approach to the Brexit negotiations. This recycles all the ideas which have been endlessly debunked since 2016, both by commentators and by events. Embedded within them is the implication that the EU has not just punished the UK unnecessarily but miscalculated its own interests (a revived version of the ‘German car makers’ argument), and that as an ex-member the UK should have some sort of ‘alumni’ status or could be ‘out and yet in’.

Mentioned in passing within the MoS article is the role of Michel Barnier, with the suggestion that he pursued a particular, political, agenda that was both punitive to the UK and, by implication, damaging to the EU. This is becoming the received Brexiter wisdom and is a thesis elaborated by Matthew Lynn in the Spectator recently. Its fatuity has been pulled apart by Tom Hayes of the Brussels European Employee Relations Group (who has also provided a separate analysis of Barnier’s negotiating approach), and I won’t add to that.

However, there is one particular aspect I want to highlight: Lynn writes as if the terms of Brexit, both as regards the Withdrawal Agreement (WA) including the Northern Ireland Protocol (NIP) and the Trade and Cooperation Agreement (TCA), were the creation of Barnier. That is in line with the habitual refusal of Brexiters to take any responsibility whatsoever for Brexit. But the fact is that both deals were negotiated with and agreed by the UK.

Stuck in the past

This has two implications. One is that the agreements were framed and limited by the UK’s own red lines about Brexit – especially exiting the single market and customs union, but also, under Johnson and Frost, of prioritising sovereignty above all else in the TCA and of removing May’s backstop in the case of the NIP. It was these choices rather than the EU’s (still less Barnier’s) ‘inflexibility’ which meant Brexit took the form it did. The other is that both the agreements were trumpeted by Boris Johnson as triumphs. In the case of WA/NIP it was lauded as the ‘oven-ready deal’ upon which he was subsequently elected. In the case of TCA he said he had confounded his critics by delivering the ‘cakeist’ deal they had said was impossible. Nowhere in any of this was it said that these were sub-optimal deals forced on the UK government against its wishes and priorities.

These facts make current Brexiter narratives both wearyingly the same as they have been since 2016 and yet newly idiotic. For they are talking as if it were still 2016 (or 2017 or 2018) and these deals were still to be made. For that matter, they talk as if the approach they currently advocate hadn’t already been tried and failed in the first half of the May administration. In a sense it doesn’t even matter if all their beliefs about what the EU could, would or should do were correct. As a matter of empirical fact the deals have been done and they are not in line with what Brexiters claimed and promised they would deliver. There is scope for the TCA to be reviewed, but it can be stated with categorical certainty that there is no way that the EU would ever agree, or would even be able to agree, to revise it in the way that the Brexiters envisage.

With almost as much certainty it can be said that the EU will not agree to change the core provisions of the NIP, and in part for similar reasons. For whilst the DUP have yet again stated their opposition to the NIP, an opposition shared by many Brexiters and, to a large degree, the British government, none of them has come up with a plausible alternative. In this sense, again, it’s as if we were still in the pre-agreement period and, moreover, it’s based on the fundamental refusal of many Brexiters to even accept that the Irish border issue is a real one, rather than the concoction of Brussels and Dublin.

It is beyond ridiculous that the Brexiters still don’t understand these obvious facts, which they could if only by imagining what the UK’s stance would have been as a member of the EU had it been another country that was leaving, including to the Irish border if that country had been Ireland. Or, if that involves too much of an intellectual stretch for them, then they might simply consider the matter in their own terms: having spent decades denouncing the EU as an inflexible, bureaucratic, legalistic, lumbering, self-serving ‘protectionist racket’ – decades, indeed, giving these as reasons the UK should leave – why is their entire strategy for how to do Brexit ‘properly’ predicated on the EU being flexible, creative, nimble, accommodating and non-protectionist?

Nothing new, except deepening depression

Very little in this post is new, but that is unavoidable whilst the Brexiters remain stuck on the same Mobius Strip in which the same failed solutions are proposed to the same problems. It also means that, as per last week’s post, we are still in a situation where there is a certain amount of realism developing (e.g. in recognizing the reality of things like supply shortages and trade barriers), but absolutely no truthfulness from Brexiters about the reasons for these realities. With that comes their pathological inability to take responsibility for the choices they made – and urged upon voters – and, always, the sickening insistence, at once treacly with self-pity and sodden with aggression, that it is all someone else’s fault.

There’s something extraordinarily depressing about the fact that all this is going to be played out yet again in the next few weeks as the NIP grace periods some to an end (I suspect they will be extended again by agreement with the EU), and David Frost resumes his attempt to renege on what he and the government agreed in 2019-20. That this is in prospect is shown by this week’s announcement that the government is to postpone implementing the rules on which goods qualify for “unfettered access” when travelling from Northern Ireland to Great Britain (and because this issue interacts with the wider one of introducing import controls, and because the necessary port facilities aren’t in place, it seems quite likely that they, too, will slip again).

Crucially, the reason given was the government’s intention to negotiate major changes to the NIP, which means the pre-summer collision with the EU will resume and intensify. That isn’t to deny there may be some scope for revising parts of it, perhaps including the Article 10 provisions on state aid (£). But it has been clear from the time it was agreed that (despite having agreed it) Johnson’s government don’t accept the basic premise of the Irish Sea border and all that comes with it.

It’s even more depressing to think that, if I am still writing this blog in five years’ time, I will probably be able to refer to that very first post five years ago as containing a still relevant truth. For what it is worth, I think I will still be writing it, at least if there are still readers for it. After all, there may be some value in having kept a continuous record of the folly and failure, the dishonesty and dimwittedness, of what has been done to all of us by the worst of us. There would seem to be no prospect of that, if nothing else, being in short supply.

 

My book Brexit Unfolded. How no one got what they wanted (and why they were never going to) recounting and analysing what happened from the referendum result to the end of the transition period was published by Biteback on 23 June 2021. It can be ordered from Biteback, or via other online platforms, as a paperback or e-book. For reviews, podcasts etc. see this page.