Brexit eruptions

Recently, a rash of molehills has appeared in my garden, the visible eruptions of a vast subterranean network of tunnels and burrows. Brexit lurks in a similar way beneath the surface of British politics, a constant presence which, however much it is ignored – perhaps the more that it is ignored – continues to break out here, there, and everywhere.

That, surely the most tortuous and tortured of the many metaphors that have been applied to Brexit, is intended to introduce the fact that this post doesn’t have any particular unifying theme other than the latest ways in which Brexit has been in view over the last fortnight.

Robert Jenrick and the Tory madness

We don’t yet know how the story is going to end, but it is looking increasingly likely that, when history is written, Brexit is going to figure as the central cause of the decline and perhaps demise of the Tory Party. For all that numerous political commentators, most recently Andrew Rawnsley, urge the party to re-discover its more moderate and pragmatic traditions, for now it seems stuck in the spiral of madness of which Brexit is the proximate cause. Thus possibly the least surprising development of the last fortnight was that their party conference showed the Conservatives to be firmly in the grip of Brexitism.

At the conference, the most obvious manifestation, or even exemplification, of this was the latest stage in Robert Jenrick’s long journey from “bland centrist solicitor” to gurning ideologue. It’s a journey made stranger because he has somehow retained his blandness along with the way, managing to be, as Ian Dunt puts it “at once banal and monstrous”. Much attention focused, rightly, on his complaint about the lack of white faces in Handsworth, a complaint made not less but more objectionable by his absurd suggestion that this remark “was not about the colour of your skin”. Less discussed, but objectionable and absurd in a different way, were his remarks about the judiciary.

Jenrick’s thesis, if we can grace it with that term, is that when judges ‘don the wig’ – a point he sought to make dramatic by flourishing such a wig – they at the same time put aside personal interests and identity so as to apply the law impartially. So far, so good. But he also claimed that, having, like every internet troll, ‘doNe he’s Own ResEArch’, he had made a shocking discovery. Apparently, there are “dozens of judges” who have used social media to “broadcast their open borders views” (whatever that means; does anyone advocate ‘open borders’?), or have “spent their whole careers fighting to keep illegal migrants in this country” (which seems to mean, based on his other remarks, that Jenrick imagines barristers to be invariably sympathetic to their clients’ causes, and retain a lifelong commitment to them).

Jenrick is either too dense or too dishonest to see that his first observation made his second claim irrelevant. To make his thesis stick, he would need evidence that the judges he identified had also given judgments which, in legal terms, were demonstrably wrong, and wrong in ways biased in the direction he claimed. Moreover, he would need to show that they had done so to a greater extent than judges who he had not identified as having this alleged bias. But of course, and this is part of what makes this an example of Brexitism, reliable evidence is irrelevant to Jenrick. What is relevant, and what makes it definitively Brexitist, is the attempt to undermine the judiciary as an institution and, with that, the rule of law. It is ‘enemies of the people’ territory again. And it hardly needs to be said that Jenrick’s supposed solution, the political control of judicial appointments, would make the supposed problem he supposedly wants to solve worse.

Whether Jenrick has become a convinced Brexitist ideologue or is just opportunistically seeking to burnish his leadership credential hardly matters. Either way, it shows that Brexitism is an obligatory posture for those who aspire to lead the current Tory Party. That fact was underlined by Kemi Badenoch’s long-expected adoption of leaving the ECHR as official party policy, a policy which is the central prescription of ‘Brexit 2.0’.

It is also, as I noted in my previous post, a policy being ‘sold’ in exactly the same way that Brexit itself was sold, even though recent polling shows that 46% of those planning to vote Tory at the next election think Brexit has been a failure (and only 22% think it has been a success). Perhaps that is why Badenoch made only a couple of passing references to Brexit in her conference speech, in itself a telling fact: far from boasting of it, the very party that delivered Brexit feels too ashamed to talk about it.

Farage’s culpability and Labour’s problem

So much for the Tories. In my previous post I also noted that Keir Starmer had begun to attack Nigel Farage on the grounds of the damage done by Brexit. That attack has escalated, with Labour now starting to argue (£) that Farage will be to blame for anticipated tax rises in the forthcoming budget because, having used “easy sloganeering” to persuade the public to vote for Brexit, he then walked away and took no responsibility for it, leaving the economic consequences which ultimately explain the need tax raises.

Farage and his supporters, and no doubt others, object that he had no control over the delivery of Brexit, so the accusation is unfounded. But that is simplistic. Farage was not in power, it is true, but he exercised considerable power, always ready to denounce as ‘betrayal’ whatever form of Brexit was proposed and never once putting forward realistic proposals for delivering it in ways that were less economically damaging than what was enacted. Moreover, at the 2019 election, he backed Boris Johnson’s ‘oven-ready Brexit’ even to the extent of standing down Brexit Party candidates in Tory-held seats.

So, yes, Farage is very much amongst those responsible for Brexit and, in any case, it is more than reasonable to point out that the main cause of his political life has proved to be a failure. It’s certainly clear that this line of attack is being made increasingly often by Labour politicians or sympathetic commentators, an example this week being an opinion piece by Kevin Maguire, Associate Editor of the Mirror.

Where the Labour government is on much trickier ground is that, to the extent it acknowledges the economic damage of Brexit it opens the question of why it has no plans to seek more than marginal limitations to this damage. Perhaps that is why Starmer’s conference speech, like Badenoch’s, had a telling lacuna, in his case avoiding any mention of his ‘reset’ policy. For if Brexit is a sufficiently serious problem to make attacking Farage’s culpability for it worthwhile, what is the government’s solution?

That is the question which Starmer has, until now, avoided and to which he cannot give a credible answer without abandoning his cast iron ‘red line’ manifesto promises, as well as ensuring that the entirety of British politics during this parliament, and probably the next election, is dominated by Brexit again. He isn’t going to do that, and that is one exemplification of the Brexit impasse that Britain as a whole is in: its entire national strategy is admitted, even by many of its advocates, to have failed, and public opinion firmly and consistently endorses the view that it was wrong to leave, but there is no presently viable political route to its rectification.

I’ve been arguing consistently, since December 2022, that there is a better approach for Labour, which would be to honestly admit that Brexit is damaging and has failed, and ought to be reversed, but to be equally honest in saying that this isn’t a political possibility until there is cross-party consensus (at least amongst parties that might credibly come to power) to make an application to rejoin. That means, in the present context, identifying Reform and the Conservatives as the barrier, making them responsible not just for the original problem but for the continuing absence of a solution. I still think that would be Labour’s best option, and with the latest line of blaming Farage for Brexit it becomes the logical next step.

A Royal Commission?

If there is ever to be a solution, one part of the route to it could be an interesting proposal made over the summer (although I have only just come across it) by former MEP Andrew Duff. Noting the “deadlock” in British post-Brexit politics, he proposes the establishment of a Royal Commission to investigate the position and future of the UK in Europe. It’s not often that a new idea about Brexit surfaces, and it’s a reasonable one in all sorts of ways, the most minimal, but not unimportant, being that, as I argued in June, it is surely right to review, given the time that has passed and the experience we have had, what Brexit has actually meant for the UK.

If nothing else, it would be a way of drawing together the now massive, but highly dispersed and fragmentary, body of evidence about Brexit, and providing some accountability for decisions made. For example, at this week’s Tory Party conference, Michael Gove admitted that the trade deals his government did with Australia and New Zealand were poorly negotiated and damaging to farmers, going on to say “we were too anxious as a government to secure those deals in order to show that Brexit was working.” Yet these highly revealing remarks were barely reported, even though they confirm exactly what so many of us said at the time, what civil servants warned ministers of at the time, and what the government denied at the time.

Assembling an authoritative single review of what happened with Brexit would, in itself, be a contrast with the evidence-free, faith-based, reality-denying politics of Brexitism. However Duff’s proposal is primarily intended as a future-oriented exercise, which could begin a process to create, to the extent it is possible, the basis for a future national consensus.

From that point of view, he is surely right to say that “the most likely outcome of such a Royal Commission will be a report that furnishes the Prime Minister with a cast-iron case for reversing Brexit.” I’m not so sure Duff is right that “it will prepare the ground for the referendum campaign that must inevitably follow”, since it wouldn’t in itself create the kind of cross-party agreement needed to make rejoining a viable possibility for the EU. But it would be a step away from the current absurdity of a nation which effectively knows it has made a mistake but can’t find a route to rectify it. At the very least it offers a practical suggestion to create such a route, in a way that eludes those who simply demand a ‘rejoin now’ policy. [1]

Still Brexiting

Whatever the wider issues in play (or which ought to be in play), it shouldn’t be forgotten that, as a matter of fact, the post-Brexit UK-EU relationship continues to limp along, largely undiscussed in public. One facet of that, which has had some media discussion, is that since the beginning of this week the EU Entry-Exit System (EES) has begun to be enforced. I should clarify that wording, perhaps, in that, whatever the pro-Brexit press may imagine (£), the EES isn’t something particular to the UK-EU relationship, as if it were a ‘punishment’ for Brexit, but, rather, applies to the EU’s relationship with third countries generally. However, in that sense, for the UK it is a consequence of Brexit and one which will introduce new complexities and, potentially, delays and queues for travelers (although in the last few hours it has been reported that, to avoid this, it is only being partly implemented for now). Sloganizing about ‘securing our borders’ suddenly looks less attractive when we are its target.

In an analogous way, whilst the Brexiters have long used the feeble pun of a ‘protectionist racket’ to describe the EU, that suddenly looks even less funny with the prospect of a massive increase in its tariffs and reduction in its tariff-free quotas for steel imports. That would be a very serious blow, perhaps even an “existential threat”, for the already beleaguered British steel industry, since almost 80% of UK steel exports go to the EU. Again, this is a consequence of being a third country although, again, with wearying predictability, the pro-Brexit press reported it as if it were aimed specifically at Britain (£).

It may or may not be that the British government manages to negotiate an exemption but, taken in conjunction with the now indefinitely stalled negotiations with the US over steel tariffs, it is a stark reminder of Britain’s post-Brexit isolation. That reminder has several dimensions, including the fact of the relative importance of the EU market as compared with the US (which, for steel, takes less than 10% of UK exports). More generally, for all the Brexiter rhetoric about Brexit enabling the UK to have a ‘nimble’ independent trade policy, it is a reminder that size matters more than agility in a world dominated by regional blocs. That is especially so when these lumbering trade monsters go to war, the wider context of the EU’s announcement being, in large part, the impact of Trump’s tariffs on the Chinese steel industry. [2]

The same ‘better in than out’ lesson applies to the EU’s Carbon Border Adjustment Mechanism (CBAM) which is due to come into force in January 2026, and which also has implications for steel, amongst other products. This is an issue which has been lurking in the Brexit undergrowth for years (I think the first time I discussed it on this blog was in September 2023, and that post includes several links explaining some of the complexities involved), but now it has been reported that a temporary deal to exempt the UK is in prospect. [3] The longer-term likelihood is that the EU CBAM will be linked to the UK CBAM (due to come in to force in 2027), along with an associated linkage of UK and EU Emissions Trading Schemes (ETS), a possibility within the scope of the Trade and Cooperation Agreement.

A permanent agreement on CBAM and ETS linkages sits alongside other elements of the still to be agreed details of the ‘reset’, including potential deals on a Youth Mobility Scheme, UK participation in Erasmus +, and a Sanitary and Phytosanitary (SPS) agreement. The latter has a particular urgency in the context of food price inflation, as Naomi Smith of Best for Britain pointed out this week, and might be agreed and implemented “within a year”, according to a recent statement from Maros Sefcovic, the EU’s Trade Commissioner.

That may be optimistic, and it is worth remembering that, price issues aside, until there is an SPS deal in place, the UK (or more accurately Great Britain) will continue with the risky policy of partial border security, having never fully implemented import controls and having now given up even the process of doing so, in the expectation of this still-to-be agreed deal. Sometimes, apparently, ‘securing our borders’ isn’t a priority.

Also sitting within the reset basket is the question of possible partial UK involvement in the EU’s Security Action for Europe (SAFE) initiative for defence procurement. It’s an issue of particular and growing salience in the context of the ever-growing threat from Russia and the declining reliability (to put it mildly) of the US as a security partner. Whilst, as Jannike Wachowiak of UKICE explains, the UK would not, as a third country, be eligible for loans from SAFE defence funds, it could, potentially, have access to joint procurements.

The growing charge list

All of these, and other, issues are a reminder not just of the ongoing negotiation of the UK-EU relationship, but of the cumbersome nature of that process, the uncertainties of its outcomes, and the limited scope of those outcomes even if the most favourable of them were to result. One consequence of that, although it is probably impossible to quantify, or even to find much information about, must be to deter investment and, therefore, economic growth. In all kinds of sectors, for all kinds of reasons, the terms of the UK-EU relationship are in flux which, necessarily, creates an unpropitious environment for investment.

Domestic political uncertainty is also a factor since Farage is already threatening to tear up any new agreements the present government makes with the EU. Even if that doesn’t make the EU wary of such agreements, it will prey on the minds of investors and indeed others trying to plan for the future. That, too, is something to be added to the growing charge list against the Reform leader and the other ‘guilty men’ of Brexit. Ultimately, there will need to be not so much a Royal Commission as a Public Inquiry if they are to be held accountable. Only by excavating the subterranean maze of Brexit will its eruptions be quelled.

 

Notes

[1] Duff’s proposal attracted several social media comments denouncing it as ‘British exceptionalism’ (in line with my usual policy, I only link to social media posts if they come from public figures). This is nonsense and reflects a wider problem. It is nonsense because there’s nothing ‘exceptionalist’ about a domestic political debate and, in this case, the idea that Britain needs a process of honest self-reflection about what has done to itself is almost the opposite. It is for the UK to face up to the consequences of its collective decisions, and to do otherwise, for example by blaming the EU for those consequences, or expecting the EU to provide solutions to them, is what might be exceptionalist.

The wider problem is that, whilst it is absolutely true that throughout the Brexit process British exceptionalism has been, and continues to be, greatly in evidence, sometimes amongst ‘remainers’ as well as Brexiters, there is a cadre of social media posters that simply parrots the word in any and every discussion of any and every aspect of Brexit (very often the same posters who ignorantly trot out ‘cherry-picking’ to describe any and every aspect of post-Brexit UK-EU relations).

Some (or more accurately one person, a rather creepy stalker who continually creates multiple pseudonymous social media accounts to harass me and various other people, including Jon Henley, the Guardian’s Europe correspondent, on the basis of entirely false accusations of anti-Irish racism) also object that my use of the word ‘Brexitism’ is ‘British exceptionalism’, since it denotes a British form of populism (I explain why that is warranted in my definition of Brexitism), which is as transparently stupid as saying that the word ‘Brexit’ is ‘exceptionalist’. Brexit happened here; Brexitism is happening here. Specific doesn’t mean exceptional.

[2] There is of course a much wider point here than trade or, rather, trade is imbricated within the wider point of the multiple areas – economy, security, defence - in which the UK is horribly caught between the US, China, and the EU. But that would need another post.

[3] Reading that September 2023 post again, I was reminded of the sad, sorry, stupid saga of the UKCA mark, the long, lingering death of which quietly continued over the summer, with the announcement that it will not be required for medical devices.

Britain's Brexit degradation

In the last few posts on the blog, especially the most recent one, I’ve suggested that it is at least arguable that the government and, in a wider sense, the British polity are becoming slightly more realistic about Brexit. That is most evident in the Windsor Framework, the refreshed Integrated Review, and possibly in the reported, though not quite announced, news that the Retained EU Law (REUL) Bill is to be delayed though not, apparently, abandoned. But that lack of clarity about REUL shows how precarious this emergent ‘realism’ is, and is damaging in its own right since it means that multiple sectors – for example healthcare – simply don’t know whether they are soon going to face major regulatory upheaval.

Political stasis is degrading Britain

This reflects a wider stasis about Brexit, such that it is both central and marginal. There is scarcely anything in the UK which is not adversely impacted by it, as attested by the superb Yorkshire Bylines’ dossier of Brexit damage which this week recorded its thousandth entry. That impact extends to the most pressing of economic problems, namely persistently high inflation. Yet Brexit has ceased to be a major political issue, at least for the two main Westminster parties and perhaps even the smaller ones, with the LibDems fairly muted and the SNP having other preoccupations.

Sunak faced down the Brexit Ultras amongst his MPs to deliver the Windsor Framework but they, and more importantly their counterparts outside parliament, remain a powerful force. That is shown by the anti-ECHR provisions of the Illegal Immigration Bill. Even if he was willing, he isn’t able to crush that force and so has little choice but to let the damage drift on, with, at most, some tinkering around the edges. He certainly isn’t going to suddenly admit the truth of what a disaster Brexit has been.

The Labour Party’s ‘make Brexit work’ position is almost the same. Whilst there are few Brexit Ultras amongst its MPs, it is also fearful of being monstered by the pro-Brexit media as well as of leave voters in its traditional electoral base, especially in the ‘Red Wall’. It’s true that there is some recent polling evidence that Labour could gain some electoral advantage if it came out clearly in saying that Brexit was a mistake, without sacrificing its current projection to re-take all of the ‘Red Wall’ seats,  but there are obvious limitations to that finding.

For one thing, any such advantage might not survive the likely shrivelling of Labour’s current huge polling lead when the next election gets closer. More importantly, Labour policy plainly couldn’t just be to ‘call Brexit a mistake’ without specifying a solution, presumably seeking to join either the single market or the EU. Doing so would immediately open up all the division and toxicity, ensure that the next election was dominated by Brexit, and, at least potentially, transform the Tory Party’s fortunes by enabling it to re-group around that single issue. So it’s not hard to understand why that survey result isn’t being heeded by Starmer and, at all events, there no sign whatsoever of him doing so.

It's also worth considering the implications of other survey evidence. It's certainly striking that public opinion on the question of whether Brexit was a mistake or not has for months been fairly stable in showing 53%-55% thinking it was a mistake and 32%-35% thinking it was the right thing. However, over about the same period as that opinion has settled, the public view of the significance of Brexit as a political issue has declined, so that only 17% currently regard it as one of the top three issues facing the country. Moreover, despite a sustained poll lead for (re-)joining the EU, opinion remains significantly divided (46% join, 35% stay out, 19% don’t know in the most recent poll) and there is little reason for confidence that the outcome of another referendum would yield a majority, let alone a clear and convincing majority, to do so.

These various results help to explain the current stasis: although the entire basis of the UK’s national strategy is seen by most people as a mistake, most of them wouldn’t vote to reverse it, and very few of them regard it as a pressing issue. That may change after the next election, given the palpable sense of a country which is in all kinds of ways ‘on hold’ until then. But, for now, it means that Brexit is like a kind of political and economic mould or fungus, slowly degrading the country, making it gradually poorer, meaner, shabbier, sillier and nastier, but with no real consensus on what to do about it.

Yet even as the main parties and much of the public settle to a resigned, impotent despair about Brexit, it has a small but powerful, well-funded, well-organized and indefatigable group of defenders, constantly twisting the truth of the damage it is doing to the country. Indeed, they are one of the biggest reasons why the main parties are so cautious about addressing or even admitting that damage. So in parallel with Brexit degradation in the sense of gradual damage and decline, there is a continued Brexit degradation in the sense of a humiliating, demeaning and corrupting dishonesty.  

CPTPP: a degraded debate

Nowhere is that dishonesty more obvious than in relation to CPTPP accession, which at the time of my last post was just being announced. Subsequent discussion of it has fairly predictably focussed on its puny estimated economic value of 0.08% growth of GDP over 15 years, by contrast with the estimated 4% loss of GDP growth over the same period as a result of the impact of Brexit on UK-EU trade. Predictable as it was, this critique met with confused and contradictory responses from Brexiters.

Trade Secretary Kami Badenoch rejected the legitimacy of such comparisons even being made. We should “stop talking about Brexit” and simply see the deal in its own terms as an economic boost. That might be fine, and in line with my suggestion that we should ‘de-Brexitify’ policy decisions. But that suggestion was the fourth in a series of steps of which the second was to drop false claims of Brexit benefits, including trade deals. Since, from Sunak downwards, CPTPP is being hailed as a proof of the benefits of Brexit freedom from EU trade policy then, inevitably, it will and must be judged against the corresponding costs. Brexiters can’t have it both ways.

Briefings for Britain

At least Badenoch’s response showed some glimmer of recognition that, judged in cost-benefit terms, CPTPP is a dud. In the deep heartlands of Brexit true faith even that is missing. For example, writing on Briefings for Britain (formerly ‘Briefings for Brexit’), one of the small group of dogmatically pro-Brexit economists, Catherine McBride, sought, first, to attack the 4% figure which, apparently, “no one on Twitter has been able to explain”. She decided that it is a garbled version of a 2018 OBR estimate of a 4.4% loss if – and she bolded her text for emphasis – “the UK left the EU on WTO terms”. So, apart from chiding the critics for having got the figure wrong, McBride accused them of ignoring the “inconvenient truth” that there had been a trade deal.

Alas, this critique was misplaced on both counts. The 4% figure is a correct report of the OBR estimate, first produced in 2020 and still expected, and it is explicitly an estimate of leaving with a trade deal. McBride went on to castigate the nay-sayers because “these were expectations of long-term changes in the UK’s GDP relative to a baseline, not an immediate 4% GDP decrease on leaving the EU”. She is quite right in that, and also right to say that some people on Twitter misunderstand that (though citing unspecified Twitter accounts is an obvious ‘strawman’), but then made exactly the same error she accused them of by arguing that:

“Brexit dissenters will be disappointed to know that the UK’s GDP increased from £2.24 trillion in 2019 to £2.49 trillion in 2022 an increase of 11% in current prices although unchanged when you account for inflation. But either way: this is not a ‘4% hit’.”

In this, unlike many Brexiters, McBride at least recognized that in real terms there was no growth, yet she, herself, suddenly ignored her own observation that the 4% figure means 4% less GDP than would otherwise be the case, not a 4% decrease in GDP.

She then turned her attention to the 0.08% figure, criticising the modelling, with an inevitable side-swipe at civil servants, as being likely to under-estimate the benefits of CPTPP. But in fact the figure was based on a new, changed, model that, if anything, would tend to over-estimate those benefits. At all events, whilst it is obviously true that any modelling can be criticised, there’s no reason given to think that the gain of CPTPP is going to be anywhere near the loss of Brexit. Indeed, the fundamental flaw in the attempts to defend CPTPP (and post-Brexit trade policy generally) on cost-benefit grounds is that entails simultaneously denying that substantially increasing trade barriers with the UK’s closest and largest partner entails much, or any, cost, whilst asserting that somewhat decreasing trade barriers with small and remote partners is a significant benefit.

Why bother?

It might be said that it is hardly worth wasting so many words on the self-evidently partisan offerings of ‘Briefings for Britain’, but that misses the way that such documents get circulated as if they were reliable evidence. For example, Reform Party leader Richard Tice did just that with the McBride briefing, describing it as “brilliant”. Moreover, writing in the Spectator, which has a much wider reach, Robert Tombs, who is one of the Editors of ‘Briefings for Britain’ and one of the most active peddlers of the kind of pseudo-analysis it specialises in, produced a very similar discussion of CPTPP. In fact, if anything, it was even more slipshod, for reasons Gerhard Schnyder explains in detail on his latest Brexit Impact Tracker blog, and itself fell prey to the slippage between criticising and yet reproducing false claims of a 4% drop in GDP. This one also got circulated approvingly by, for example, David Frost, who described it as “excellent”.

Admittedly a disinterested observer wouldn’t be hugely impressed by endorsements from Tice and Frost. This is peer review only in the sense that the authors and reviewers share a common dogma. But whilst it’s true that no serious analyst takes them seriously, within the Brexit bubble such writings do contribute to the degradation of political discourse by purveying misinformation and, at best, half-truths, and that is amplified by high-profile recommendations.

Endless opportunism

One of the many reasons why that degradation of political discourse has occurred is that, throughout the Brexit saga, Brexit ideologues have been adept in their opportunism, especially in economic arguments. Pre-referendum claims that Brexit would be hugely economically beneficial effortlessly segue into defences that ‘it hasn’t been as bad as some predicted’, or into outright denials that it was ever proposed as an economically beneficial project but was ‘all about sovereignty’.

That opportunism can be seen In relation to CPTPP, where there has also been a shift from attempts to justify it on economic grounds to asserting that its real value isn’t economic at all, but ‘geo-political’ (£). It isn’t an entirely fatuous argument, and is made by serious analysts such as Marianne Schneider-Petsinger of Chatham House, who stresses in particular its significance for cementing UK-Japanese relations, themselves much damaged by Brexit. But in the hands of Brexiters like John Longworth it becomes entirely opportunistic and internally contradictory.

For one thing, Brexiters also repeatedly laud CPTPP as against EU membership on the basis that it is simply about trade rather than politics, so it hardly makes sense to make political heft the claim for its value. For another, it fails as an attempt to side-step the embarrassing fact of the disparity in economic value of the two memberships in that exactly the same applies to any geo-political value it may have. If, as Longworth says, having a ‘seat at the table’ and ‘being in the room’ is what makes CPTPP worthwhile, then how does that stack up against not being at the table or in the room of the EU? What, concretely, does the former enable the UK to do? And what does the latter preclude it from doing?

Daily life degraded

As I said in my last post, CPTPP isn’t necessarily a bad thing, and Schneider-Petsinger is right to see it as having some strategic value - given that Brexit has happened. But this is only damage limitation and, as such, different not only to what Brexiters claim about CPTPP but also to what they promised for Brexit. In fact, as time goes by, it becomes ever clearer that Brexit has done nothing but create new problems for which damage limitation is the best that either the present government or a Labour successor have to offer.

The recent Easter holiday queues at Dover are a good example. The predictable Brexiter insistence that these were nothing to do with Brexit was quickly discredited, largely because of some robust reporting from the BBC and other media outlets, facilitated, perhaps, because Simon Calder, the media’s go-to travel guru, is a respected independent expert who feels no need to pull punches on the causes. But, given Brexit, what are the solutions? One is just to accept that, at least at busy periods, we are stuck with massive queues over and above those that occurred before Brexit. Building extra facilities, something previously rejected by the government, might help, a reminder that both Brexit and the incompetence of its execution are the problem. But the realities of the need to ‘wet-stamp’ passports at facilities where e-gates are not feasible mean that, as has already happened on Eurostar, the ultimate solution is to reduce capacity, meaning less choice and higher prices for customers.

Also recently in the news have been the difficulties faced by travellers from the EU in visiting Britain. These include the fact that these tourists aren’t able, as before Brexit, to simply use their national ID cards, meaning that they either have to go to the expense of getting a passport or choose a different holiday destination. Unsurprisingly, this means numbers have fallen. School and other group trips from the EU face particular disruption, where paperwork problems for just a few members of the travelling party can scupper the journey, problems made all the more likely by the ‘Kafkaesque’ post-Brexit visa system (£). As a result, French schools increasingly favour Ireland as a destination. And there are similar difficulties faced by EU groups coming for commercial or cultural purposes, from touring punk bands to opera singers.

All of these things come with costs, both economic and non-economic. The economic costs are obvious, for example in the loss of tourist income. But, especially in the long-run, the non-economic costs of declining interest in and knowledge about the UK, and its declining reputation as a friendly and welcoming place, are perhaps even more significant (and, indeed, may have knock-on economic costs, too). To some degree they are problems that can be smoothed. There is already talk of simplifying processes for French school trips, for example. But that will take time and will have to be replicated on a country-by-country basis even to get back to something like the pre-Brexit situation. EU travellers could be admitted using their ID cards again, though there is no sign of that. The UK could create an efficient and user-friendly visa scheme, but that seems an even more remote prospect given a Home Office that failed even to provide visas for a visit from a Ukrainian state orchestra (and, thereby, did yet more reputational damage to the UK).

Trade degrading, with worse to come

What is more likely is that each of these things, in itself not disastrous, adds another layer of damage, as things that used to be very easy become very hard. At an aggregate level, that can be seen in the latest calamitous ONS figures for UK goods exports, now established as by far the weakest in the G7 for over two years (£). In fact, the picture for trade in general is bleak*. The ONS’s latest quarterly figures show that exports of both goods and services to both EU and non-EU destinations have fallen. There is not a shred of credibility in blaming this on the pandemic or the Ukraine War, which affects all countries, with the Institute of Directors stating (£), “it is clear that Brexit has had the largest influence”.

What we are now starting to see in these aggregate figures is the effect of all those ‘small stories’, dismissed as anecdotal by Brexiters, of mainly small companies which have struggled with, and in many cases given up on, exporting to the EU. But no less important is the more hidden story of larger companies coping with the new barriers but, as a result, increasing their cost base and becoming less competitive. What has happened, as I anticipated in January 2021 when the transition period ended, is not a process of dealing with ‘teething troubles’ but one of making long-term structural adjustments to the UK’s permanent detriment.

That process is not over. Although already badly affected by post-Brexit customs formalities and other costs, imports from the EU have not yet been subject to full controls in the way that exports to the EU were since the day after the transition period ended. Now, after several delays, that is set to change in what is expected to be a staged process beginning in October 2023 but with the main measures coming into force over the following year. Although billed by the government as a ‘slimmed down’ and ‘risk-based’ border, this will entail new processes and costs, estimated as £420 million a year. It should be added that a risk-based border, whilst cheaper in upfront terms, may turn out to be much more expensive if there turn out to be defects in ‘low risk’ products.

The consequence of import controls will be a mixture of more expensive products or reduced consumer choice, and possibly some import substitution (i.e. domestic production of what were hitherto imported goods), though that, too, has cost implications since it implies production only becoming viable because imports have become more expensive. That these are new costs, entailed solely by Brexit, was admitted by the government when their introduction was postponed.

It is therefore, to say the least, perverse that the government is claiming the (arguably) lower cost of the ‘slimmed down’ controls compared with those it was originally going to create to be a “saving” from “reduced red tape” (£). If post-Brexit visa processes are ‘Kafkaesque’, then that inversion of truth is surely ‘Orwellian’, but here again we can see how what is, at best, damage limitation is now being claimed as a ‘Brexit benefit’. Thus, along with the degradation of terms of trade we see another degradation in political honesty.

A country degraded

It’s always been easier to predict, explain, and measure the economic degradation of Brexit than its geo-political damage, but Joe Biden’s trip to Ireland provided a further illustration of the latter. Agreeing the Windsor Framework headed off the threat that he might not come to the UK for the anniversary of the Good Friday Agreement, but the continuing deadlock over the Assembly was a reminder of the damage Brexit has done. Hence Biden made only a perfunctory stop in Northern Ireland, including a short, awkward and bizarrely low-key coffee meeting with Sunak. That was followed by an extensive, high-profile and markedly warm tour of Ireland during which, whilst addressing Ireland’s parliament in almost extravagantly friendly terms, he urged that the UK “should be working closer with Ireland”.

Brexiters, and the right-wing media in Britain generally, were moved to bitter comment, much of it focussing on Biden personally and some of it saturated with anti-Irish prejudice. But what the visit illustrated had little to do with Biden and much to do with what Brexit has done to the UK’s international relations and standing. The UK-US ‘special relationship’ has long been a polite fiction, apart from intelligence, especially signals intelligence, and, to an extent, defence cooperation. Brexit ended, for good, the UK’s strategic role as a US-EU bridge. And any idea that Trump would offer a new form of UK-US partnership, whether in trade or anything else, was always naïve, as it will still be if he comes back for a second term in office.

As for Ireland, Biden is by no means the first US President to place deep importance on his Irish heritage, and certainly not the first to recognize the political importance in the US of the Irish diaspora or the importance of that diaspora to American history and identity. Hence the US was closely involved in the peace process and has a large stake in it, so that it is now pivotal to US-UK post-Brexit relations. Moreover, Ireland is a significant international player in its own right, a significance enhanced by its membership of the EU, as has been shown not least by the Brexit process itself. It is an object lesson in how the sovereignty-sharing enhances rather than, as Brexiters have it, diminishes national power, and one all the more unpalatable for those Brexiters who think “the Irish really should know their place”.

A country degrading itself

So Biden’s Ireland visit and the British reaction to it rammed home the double degradation of Brexit. On the one hand, it showed how the importance of the UK has been degraded. On the other hand, the combination of neediness and nastiness in the reaction was shaming.

In October 2017 I wrote a post entitled ‘Brexit is bringing humiliation to Britain, and there is much more of it to come”, and in September 2018 that “Britain is humiliating itself”. In both cases, the core of the analysis was that this humiliation came from the government’s refusal to accept or acknowledge the realities of what Brexit means. It’s this which links the two senses of degradation: the more persistent the dishonesty and fantasy of Brexit politics, the more the country becomes diminished, poorer, and daily life more difficult.

It is now 2023 and, yes, there are the tiniest glimmers of realism about Brexit, but they are limited, painfully slow in coming, and fought every inch of the way by the Brexit Ultras. Thus Britain’s Brexit degradation continues, and there is no end in sight.

 

 

*A rosier picture is presented in the government’s latest UK Trade in Numbers briefing, released yesterday. It is partly based on the same ONS data I mentioned, so why the discrepancy? One reason is that the briefing highlights annual changes, rather than the monthly and quarterly changes which are what is new in the ONS data. Another seems to be because the briefing states that “figures include non-monetary gold and other precious metals”. However, for its main reporting the ONS excludes non-monetary gold and other precious metals, explaining that such trade “can be large and highly volatile, distorting underlying trends in goods exports and imports”.

The charge sheet against Brexit’s guilty men just keeps growing

The long-awaited Budget – in all but name – has now arrived, but the public could be forgiven for not realising the extent to which it is a Brexit budget, given the near taboo in the Conservative and Labour parties on mentioning the economic consequences of Brexit. I discussed that silence in a Byline Times article this week, describing it as being ‘Lady Chatterley’s Brexit’, and won’t labour the general point here (the article is free to read). In any case, I’m hardly the only person making the same observation, both in the UK and abroad.

Suffice to say, it was a silence barely broken in yesterday’s announcement. Jeremy Hunt spoke vaguely of making use of “Brexit benefits” whilst Rachel Reeves’ response, although in other ways robust, merely mentioned in passing Labour's intention of “fixing the holes in the government’s Brexit deal”. Yet in the accompanying OBR report it was once again laid out what Brexit meant for the economy. It was left to smaller parties, most notably the Green’s indefatigable Caroline Lucas, to point this out, and also to point out that his silence about it made a mockery of the Chancellor’s claims to ‘honesty’ about the country’s financial situation. As Paul Johnson of the IFS said earlier this week, Brexit “has had a substantially negative effect on the UK economy”.

There’s really no room for serious doubt about that anymore and, in a sense, this Budget is the latest instalment of the so-called ‘punishment budget’, much mocked by Brexiters as ‘hysterical’ and ‘Project Fear’, that George Osborne warned would be necessary if the UK voted to leave the EU. That ‘punishment budget’ would have involved £30 billion of measures, half tax increases and half spending cuts. It didn’t happen in the immediate way Osborne had threatened, but has developed more gradually, and actually we can now see how modest his proposals were compared with the scale of damage Brexit has done. For, even before these latest announcements, Sunak’s March 2021 budget had already introduced record tax increases of £29 billion to (almost) cover the costs of Brexit at that point.

It's a Brexit Budget in another sense, too, arising as it does from the catastrophic failure of the Truss mini-budget, that ended her premiership. For that was explicitly hailed by Brexiters (£) as being the budget that would finally begin to deliver true Brexit, and was drawn up by pro-Brexit politicians, surrounded by pro-Brexit ideologues in explicit rejection of the supposedly anti-Brexit Establishment in the form of civil servants, the OBR, the Bank of England (BoE) and all the other bugbears of Brexit’s gimcrack revolutionaries. It left a £55 billion ‘black hole’ to fill, and massive reputational damage.

The Observer columnist Sonia Sodha is certainly right to argue that the concept of a ‘fiscal blackhole’ is misleading, and that there were different and better ways to respond to this mess. But that the mess had to be responded to isn’t in doubt, and this Budget is the government’s way of doing so. So, during an interview with Bloomberg’s Lizzy Burden (whose coverage of Brexit has been consistently excellent), former member of the BoE monetary committee Michael Saunders was equally right to say “without Brexit, we wouldn’t be talking about austerity this week”.

That is damning, but we could also turn all this round on its head. The post-Brexit economic debate has been almost entirely one where both remainers and independent economists point to the damage that has been done, whilst Brexiters and pro-Brexit economists deny it. It’s as if the important question were: was ‘Project Fear’ right? But Brexit was sold on the basis that it would positive for the country. In that sense, the clearest indictment of its failure is that literally no-one is suggesting that Britain’s fiscal position is better as a result of Brexit. 

Failure: conformity assessment

If the Budget is the most high-profile, even if under-acknowledged, example of Brexit’s mounting failure, others are, more or less quietly, gradually being admitted. At the quieter end of the spectrum, this week Business Secretary Grant Shapps announced another extension to the introduction of compulsory UKCA marking, and to the end to the validity of CE marking, on goods sold in the UK. Originally due to come into force in January 2022, the deadline had already been extended to January 1 2023 but, as I remarked a couple of weeks ago, it was all but impossible that firms would be ready to meet this.

This week’s statement extended the deadline to the end of 2024. But it would not be at all surprising, and the latest announcement hints at this, if these extensions go on and on being made until, eventually, the entire UKCA idea is dropped. It’s also by no means unlikely that the same will end up being true of the now four times delayed introduction of import controls on EU goods, currently postponed until the end of 2023.

This whole saga of conformity assessment marking, which I’ve been discussing on and off since March 2021, is a microcosm of Brexit folly, imposing a double regulatory burden on manufacturing firms which sell in both the UK and the EU. It arises solely from a theocratic, ‘sovereignty at all costs’ approach to Brexit. It had no economic or business rationale, and indeed Shapps’ announcement implicitly acknowledges that UKCA marking constitutes a cost for businesses and a distraction from their priorities. Also implicit is that those businesses which have begun to comply have already incurred costs, and if the whole scheme ends up being abandoned then those costs will be a total waste of money. For that matter, what are firms who are not currently ready to comply meant to do now? Continue to prepare for something that may never happen? Or take a bet that there is no need to do so?

As well as being a stupid idea, UKCA marking was stupidly done. The original timescales were always unrealistic, and, like many other aspects of Brexit, it would have been far better to have created a genuine – and long – transition period. The issue wasn’t just business preparedness but, again as with many aspects of Brexit, the time needed to prepare the regulatory infrastructure to register and certify the new markings (even though, just to hammer home the full nonsense of the idea, the actual product standards need not change at all). But the Brexiters have always been not just unrealistic but totally reckless in pushing for an early and quick Brexit, starting with the massive pressure they put on Theresa May to trigger Article 50. If there is a rational explanation for that, it is the wholly disreputable one that they knew how slender and flawed a mandate they had for Brexit, and were determined to ram it through whilst they had a chance.

The decision to postpone UKCA is, in one sense, a sensible one, in that at least it is better than insisting on the previous unworkable deadline. What would be far more sensible, of course, would be to abandon it completely, now, rather than defer it. But that, presumably, is still in the realm of the politically impossible, for fear that the Brexit Ultras will erupt in fury.

Failure: independent trade policy

Some aspects of the UKCA fiasco are present in one of this week’s louder admissions of Brexit failure, the wholesale denunciation of the UK’s trade deals with Australia and New Zealand by George Eustice. There are multiple important aspects of this. One is that Eustice, formerly DEFRA Secretary, was closely and directly involved in the negotiation of those deals. Another is that he is a long-standing Brexiter, originally a European parliamentary candidate UKIP (in that respect his intervention has some parallels with that of Theresa Villiers over the scrapping of EU retained law, discussed in last week’s post). So although none of his criticisms are new, having been made extensively by commentators, including me, for years, they are significant in showing how they are starting to be admitted by Brexiters themselves.

That’s particularly so given that the UK’s capacity to make its own free trade agreements is not just any old aspect of Brexit. It is repeatedly and vociferously claimed by Brexiters to be amongst the most crucial of Brexit dividends, and these two trade deals are so far the entirety of that dividend. Moreover, it was repeatedly claimed by the government that these deals were good for British farmers. Now, Eustice reveals in public that the critics were right, and that both the Australia and New Zealand deals conceded British interests, especially farming interests, with no compensating return. The reason, as again all informed observers have repeatedly said, was because the deals were rushed (£), giving the other countries anything they wanted, solely in order to ‘prove’ to the public that Brexit had benefits.

At the same time, Eustice made an astonishing attack on the competence of Crawford Falconer, now the most senior civil servant in the Department of International Trade. But, unlike other Brexiter attacks on the civil service, this was made against someone originally brought into the Civil Service, by Liam Fox, precisely as an antidote to the supposedly obstructive remainer ethos of the career civil service. He came from the infamous pro-Brexit thinktank the Legatum Institute, having been, along with Shanker Singham, one of the hard Brexiters’ go-to trade experts.

So, again, this is revealing of much about the entire Brexit process: its unnecessary haste, its emphasis on the symbolism of sovereignty, its disdain for established expertise in favour of ideological fervour, and, of course, the ever-present Brexiter dishonesty in the lies told about how wonderful these deals were for Britain and for British farmers. Not only that, but the government, and specifically Liz Truss when Trade Secretary, were warned at the time of the dangers but pressed on regardless. And to all that can be added the side-lining of parliamentary scrutiny of the deals, ironically one of the things claimed to be of value in being able to make them independently of the EU (a claim itself based on another lie, since, whilst still a member, the UK had chosen to exempt itself from holding parliamentary votes on the ratification of EU trade deals).

Whilst it is revealing, and to that extent welcome, that Eustice has now confirmed what so many had said all along, it is hardly to his credit that he did not have the spine to do so whilst still in government, when he described the Australia deal as “a good agreement”. Even more disgraceful is the fact that Rishi Sunak implicitly agrees – calling the Australia deal “one-sided” and saying that future trade deals will “not sacrifice quality for speed” – and yet intends to push on to the final ratification of both deals by passing the Trade (Australia and New Zealand) Bill. Again, the reason is presumably fear of how his Brexiter MPs would react if he did otherwise.

It’s difficult to over-state how despicable and just plain absurd this situation is: that in the name of sovereignty, and for fear of those who proclaim sovereignty’s benefits, the British government is going to make international agreements which are damaging to the national interest and to a strategically, historically and culturally key sector of the economy.

Two kinds of failure

It's important to differentiate two aspects of the damage Brexit is doing, albeit that they interact. One, encapsulated by the budget, and shown almost daily by the growing economic evidence, is to do with what has been lost – especially in trade, investment, and labour market flexibility – by virtue of leaving the EU, and particularly the single market and customs union. The other is to do with the abject failure and utter incompetence of what is being created as an alternative to EU membership. That includes the stupidity and waste of UKCA and other regulatory duplications, as well as the creation of duff trade deals. But it goes much wider than that.

No realistic strategy

In a sense, the issue is that there is simply no post-Brexit economic strategy at all or, to the extent that there is, it is wholly unrealistic. The most obvious idea, that leaving the EU enables greater gains through globalizing trade was always nonsense, partly because of the constraints of geography but also because it was based on the falsehood of there being an either/or choice between EU trade and world trade as an EU member. In fact, being in the EU facilitated both, whereas being out significantly impairs EU trade whilst barely, if at all, shifting the dial on trade with the rest of world.

That aside, such strategy as there is has been based on boosterism and hubris about Britain as a world-leading innovation hub, but it is all talk and very little walk. The historian David Edgerton gives a defining example in the sorry story of the Britishvolt gigafactory, concluding that “Brexit Britain has faked it but not made it”. Another case is the replacement for the Galileo Project, which is still in limbo, a situation arising from a complicated chain of events but ultimately rooting back to Theresa May’s refusal to accept the EU’s terms for continued participation in the EU’s system (at the time, she said that “as a global player we are not short of options”). And the post-Galileo situation is part of the wider issue of the UK’s Space policy, where, as Peggy Hollinger of the Financial Times put it this week (£), “the government’s ambition in the sector is at odds with its strategy”, an ambition she goes on to criticise for its “incoherence”.

This hubris, boosterism and lack of realism shares, along with the ideas of the UK being able to dictate global terms of trade and of being able to act as a global regulator, the common root of a fantasy about Britain’s global significance, perhaps encapsulated in the endless invocation during the referendum and afterwards of the power that being “the world’s fifth largest economy” bestowed. It was based on an illusion: there are three economic superpowers and they are the US, the EU and China. After that, being fifth, tenth or even fiftieth comes to much the same thing in terms of setting terms.

Dither and uncertainty

But the situation it is worse than that. Even at the domestic level, there has been no coherence in what the government has tried to do with its post-Brexit ‘freedoms’. Farming policy is a prime example where, leaving aside the issue of trade deal impacts, the Environmental Land Management System (ELMS), set out in March 2021 as the post-CAP system for England is already mired in uncertainty. Under Truss, it seemed that it would be reviewed and replaced, then that was called into doubt when Sunak came to power, but now it appears that it will indeed be scrapped. There are related doubts about whether the post-Brexit ban on the export of live animals will be reversed.

This is just one part of a wider picture in which, according to the Social Market Foundation, uncertainty about regulatory policy across the economy is inhibiting growth. It is an uncertainty which is massively enhanced by the EU Retained Law Bill which, despite noises to the contrary, is still in process, with the potential for as yet unspecified regulations to be changed or scrapped as early as next year. That uncertainty is not helped by the almost daily drip of articles from influential Brexiters proposing all sorts of regulatory changes which are either not specified or which airily suggest things like departing from the GDPR framework with no apparent understanding of how this would poleaxe UK businesses and other organizations. And there is also the ongoing uncertainty of which Brexit faction will win out over whether there is a maximalist or a minimalist immigration policy, a question about which the Budget statement remained resolutely agnostic.

All of this is without even discussing the continuing uncertainties over the Northern Ireland Protocol. These bear heavily on the people of Northern Ireland, and especially on the fragile politics of the post-GFA devolved institutions. At the same time, they mean a continuing cloud over the UK’s international reputation, with its threat to break international law still present, if perhaps more muted than it has been. And, again, there is still no clear strategy about this, any more than there has ever been. Instead, there has been denial, dishonesty or – which is most apparent now – drift. Certainly there is no sign that Sunak’s government have any idea how to proceed except for promising to resolve matters in time for the anniversary of the GFA, apparently under US pressure (as I suggested would happen in last week’s post). Exactly how that is supposed to happen no one knows, least of all, it would seem, Sunak himself.

The guilty men (and, yes, they are mainly men)

None of this uncertainty has been helped by the massive churn of ministers in many departments, itself an artefact of the post-Brexit political instability that has seen five Prime Ministers and two General Elections since the referendum. However, it goes much deeper than that. Both the damage done ‘by Brexit’ and the damage created by what is being done ‘with Brexit’ can be traced back to the total ignorance, wilful dishonesty, and reckless irresponsibility of those who proposed and campaigned for Brexit without the tiniest understanding of how to do it – something we have seen play out since 2016 – and without any understanding of what to do with it, something which is now playing out ever more clearly.

We know who they are*, these latter-day guilty men, from Farage through Johnson, Gove, Hannan, Paterson, Rees-Mogg, Francois, Duncan Smith, Baker, Cash and any number more, right through to Sunak (and, yes, women, too, like Stuart and Hoey). We know who their henchmen in the media are, the Hartley-Brewers and the Heaths and their innumerable clones. We know who gave them their tiny shred of intellectual ballast, the Minfords and the Littlewoods and the Howes, or their skin-deep patina of business credibility, the Martins and the Longworths and the Dysons. We saw their promises, their falsehoods, their evasions, and their lies, and they are all on record. On record, too, is all the spite and ridicule and bile they threw at those who warned them, who pleaded with them, not to inflict this on our country.

And as I’ve suggested in this post, their guilt is not just for having campaigned for Brexit but for all they have done since. I don’t usually quote Tweets unless they are posted by public figures, but this, from Dr Simon Ubsdell this week, is a perfect summary: “The worst crime of Brexit is not the dark skulduggery that secured it in the first place. It is the relentless mendacity, the shameless fraud, the arrogant deception, the unremitting shiftiness that has driven it ever since”.

It would be comforting to think that they will pay a price, these guilty men, if not through public arraignment then by dint of private remorse. They will not. That falls to the rest of us. We’re paying, literally, in literally devalued pounds and pence, as in this week’s budget, and the bill will go on rising. We’re paying, too, in the more intangible currency of a country whose reputation is sullied abroad and which is shabbier and meaner for those who live in it. A diminished and dolorous land whose only route to salvation lies in the honesty stolen by its guilty men and which, even now, or at least for now, eludes us.

 

 
*Others who have drawn this comparison, such as ‘Cato the Younger’, Anthony Seldon and, most recently, Tom McTague configure the list of names differently, but the charge sheet is much the same.

The debate about economic forecasts

The statement by the Bank of England that its forecasts of the effects of Brexit have proved wrong has been greeted with glee by Brexiters and led to economic forecasting in general being denounced. There is no doubt that economic forecasting is a problematic activity, but it is important to make several points about the Brexit forecasts.

First, they were an attempt to respond to the Leave campaign’s claims that the UK would flourish or at least come to no harm if people voted to leave. Those were every bit as much forecasts as those of the Remain campaign, even though they were not backed up with any analysis. Similarly, claims about the £350M a week for the NHS if we left, the fall in immigration if we left, and the prospect of Turkey and other countries joining the EU if we didn’t leave were all forecasts, and they have all now been disowned by leading leavers.

Second, like all economic forecasts, those made during the Referendum campaign were based upon assumptions and simplifications. Most importantly, many of them, including that made by the Treasury, assumed what was then believed to be inevitable namely that Article 50 would be triggered immediately after a vote to leave (see paragraph 1.42 of the Treasury short-term forecast). It wasn’t, and instead we have been in a limbo since. So far as the BoE forecast is concerned, it did not (bizarrely, perhaps) factor in the actions that it, itself, would take if the vote was to leave: quantitative easing and a cut in interest rates. Both those things happened, and mitigated the effects of the vote, but they were not cost-free and the price of them is being paid by pension funds and savers. So whilst some of the adverse effects the BoE predicted have not so far occurred, it is because of other adverse effects created by the BoE’s attempts to prevent their predictions coming true: the cost of the vote has been displaced and deferred, not avoided.

Third, it is simply not the case that the vote has passed without very severe economic consequences. The rapid fall of sterling is the most obvious, and would in any other circumstances have been understood as an economic catastrophe. The knock on effects of inflation are beginning to be felt. And there have been significant deferrals or abandonments of investment. Most economists continue to believe that the long-term effects of Brexit will be bad. At the very least, the jury is still out and some things can be said with certainty: whenever the government indicates that a hard Brexit is in prospect, the pound falls; and the government’s fiscal position has deteriorated to the extent of £59 billion over five years as a result of the vote. This isn’t just ‘forecasting’, it means real additional cuts in public services, which will affect real people’s lives, which wouldn’t have occurred if the Brexit vote hadn’t happened. Again, in any other circumstances this huge collapse in public finances would have been seen as a major economic crisis. Post-Brexit it is all but ignored.

Fourth, and it is a version of the first point, although Brexiters are now decrying economic forecasting, they are happy enough to take as gospel those that have recently been provided by lobby group Change Britain saying that hard Brexit would make the UK £450M a year better off and create 400,000 new jobs. If forecasting is so discredited then why should we believe these figures?

Similarly, much Brexiter attention has been given to a report by a group of Cambridge economists saying that the official forecasts were wrong and that there would be little economic effect from Brexit. Seldom can an academic working paper have been accorded such respect! What is striking about that is, first, that we can be sure that had reached different conclusions it would have been derided as the work of the elite (or ignored altogether) and, second, that what is being lauded is the application of a new and as yet unproven model of economic forecasting. In short, there is much confirmation bias in play here.

With all that said, I have always been reluctant to try to quantify the effects of Brexit and in various talks I gave before the Referendum refused to do so. I have adopted the same approach on this blog (for example on last September’s OECD statement, and in the very first post I said that there was no point in following each and every economic indicator whilst we were still in the EU).  Instead, what should command out attention is the logic of different institutional arrangements. What I mean by that is that leaving the EU is a massive institutional change for the UK. That ought be to common ground between Brexiters (or else – why leave?) and Remainers (or else – why care that we are leaving?).

If that is so, then [given that 50% of our trade is with the EU and another 16% via EU trade deals – so – 66% of our trade – and given that some, at least of our foreign direct investment relates to single market membership, and given that many of our industries from agricultural harvesting to the most advanced science are dependent on free movement] how could it be anything other than true that it will have massive economic effects? No country has ever tried to simultaneously detach and re-attach itself to the global economy, with no clear process or timescale or terms for doing so, and that in itself makes predictions all but impossible, except to say that the consequences will be hugely destabilizing. For sure Brexiters might say, as some do, that any price is worth it. For them, no economic forecast matters. Or that in the long run the effects will be positive - and what is that other than an economic forecast, albeit based not on data modelling but on blind faith?

A dangerous limbo

We remain in a situation of complete limbo as to what the government plans to seek for Brexit, possibly because of the forthcoming Supreme Court case but also, presumably, because they have no agreed plans.

A chance photograph of some notes, apparently from a briefing meeting, was seized on by the media for what it might disclose about these plans, but I am not sure that any of the speculation was warranted by what it showed. Instead, it seemed only to suggest an almost embarrassingly naïve and thin set of ideas. Very basic options (EEA, Canada, ‘having our cake and eating it’) were noted, along with the idea that services will be difficult to do a deal over because of ‘the French’ (services are difficult to deal with full stop; the idea that this is because of Gallic ill-will is banal). It seemed to be ‘Janet and John learn about Brexit’, and if this really is the level at which discussions are occurring within government then we are in serious trouble.

What is becoming ever-more clear is the massive damage already being done, even before we get to the point of triggering A50. The recent budget predicted a £100bn fiscal black hole over the next five years as a result of Brexit. This is not, of course, the full price tag of leaving the EU, just the effect on the government’s budget and, moreover, it was a cautious estimate provided by the independent Office for Budget Responsibility (OBR) – the reality may well be much worse.

Even this cautious estimate brought forth howls of anger from Brexit politicians and newspapers, with the OBR viciously attacked. This is now the habitual mode of conduct of the Brexiters. Unable to come up with any plan or any forecasts of their own, they simply lash out at anyone who injects any kind of realism into the situation. This is what happens when a protest movement founded on lies and fantasies actually wins: they continue to be a protest movement but get angrier and even more detached from reality.

Another indication of that is the response of the Brexiters to the refusal of the EU to agree a deal on the rights of existing (including British) migrants within the EU. There is a very good reason for that – it can only be agreed as part of the exit negotiations, which cannot start until A50 is triggered. But for the Brexiters it is just another occasion to proclaim victimhood at the hands of the EU, as if the consequences of Brexit were something that had been forced upon them, rather than something they had agitated for.

At the forefront, if only because the media afford him such attention, of the most spiteful Brexiter rhetoric is the Conservative backbench MP Jacob Rees-Mogg. Described as a ‘leading Brexiter’ (although he played little role in the campaign) this epitome of establishment privilege (Eton, Oxford and the City) depicts himself as an anti-establishment voice and specialises in ill-informed invective against any who dare prick the bubble of Brexiter fantasy. His repeated baiting of Bank of England Governor Mark Carney – about the only person to keep the UK economy on the road since the referendum – is noteworthy both for its nastiness and for its ineffectiveness. Carney, a sophisticated and highly intelligent technocrat, is well able to look after himself and his critics were humiliated by having to beg him to extend his term of office, knowing that his departure would cause a further collapse of the pound.

The Rees-Mogg versus Carney mismatch is a microcosm of a much more serious problem. For it cannot be said often enough or forcefully enough how dangerous the current situation is. Just about every person who is competent to make a judgment knows that Brexit will be a disaster – a disaster that is already happening – and that a soft Brexit is the least-worst way of enacting the letter of the Referendum decision. But there is no political mechanism to enforce that judgment. The entire future of the UK is now being held to ransom by a small group of Conservative MPs, such as Rees-Mogg, who are completely detached from reality and who will not allow anything other than the hardest of Brexits to occur. Meanwhile UKIP, under its new leader, is, as I predicted in a previous post advancing the even more insane idea of leaving the EU without triggering A50 at all.

I have just returned from France where, understandably, most political conversation is concerned with the forthcoming Presidential election there. But there is also plenty of interest in Brexit and the overwhelming sense is one of bemusement; bemusement about the referendum decision itself, and about the UK government’s lack of clarity about what it wants. But more than that an amazement that Britain, which is seen in France, as in many other countries, as a bastion of pragmatism and political stability should have become, as one person put it to me ‘completely crazy’. It’s a truism that if you hear your country criticized when abroad you instinctively defend it, whatever your own reservations may be. It is a mark of how desperate the current situation is that I felt neither inclined nor able to offer any defence.