Trade down, economy sinking, support falling: is the tide finally turning on Brexit?

 

Trade down, economy sinking, support falling: is the tide finally turning on Brexit?

 

Three years on, Bregret hits home in Britain. For the EU, though, life has moved on

 

Michael Savage and Toby Helm

Sun 5 Feb 2023 07.00 GMT

https://www.theguardian.com/politics/2023/feb/05/trade-down-economy-sinking-support-falling-is-the-tide-finally-turning-on-brexit

 

Throughout the turbulent years that Michel Barnier spent dealing with Brexit, the former EU negotiator’s endless talks with British counterparts failed to help him answer the simplest of questions – what did they want Brexit to achieve?

 

“For me, for many of us, Brexit remains a nonsense,” he told the Observer. “Taking into account British national interest, there is no added value to being outside the single market and the customs union. Throughout this process, I asked British leaders every day –from all the parties, [Nigel] Farage, trade unions or the business community – to give me proof for the added value of Brexit. Nobody was able to do this.”

 

Barnier has been taking to the UK airwaves in the last week to promote his diaries of those fractious talks, in which he repeatedly used his “ticking clock” metaphor to highlight the position Britain found itself in as it prepared for life outside the EU.

 

The clock has now ticked on three years. Barnier is struck by the difference in the debate between the UK and the rest of the continent. “To be frank, coming back to London, I see that Brexit is always on the front page,” he says. “There are many questions and many polls, but it’s not the case in the EU. Brexit is no longer a problem for us. We have turned the page.”

 

We were told we’d have a lot more money in the UK. Actually, we were totally mis-sold

Caller, BBC 5 Live

 

to the one that engulfed the UK before Brexit took place. Radio phone-ins once dominated by shrill, entrenched campaigners contained case studies of Brexit’s banal complications. BBC Radio 5 Live’s breakfast programme heard from a nursery owner, a sheep farmer, a transport company boss and a pet food company about the complexities of cross-border trade.

 

“I actually voted for Brexit, and I’ve got my own reasons for that – I want the UK to be in charge of our own laws,” said Alison, a caller whose business works with manufacturers. “We were told we’d have a lot more money in the UK. Actually, we were totally mis-sold.”

 

 

Others who voted for Brexit talked of incompetent ministers or a failure of the ruling elite to “get behind” the concept. As if to bring home the realities of life outside the bloc, Brexit’s anniversary celebrations coincided with a warning from the International Monetary Fund that Britain will be the only major industrialised country to see its economy shrink this year – and perform even worse than sanctions-hit Russia.

 

So, three years after Britain’s EU departure, is the country coming to the same conclusion about the benefits of Brexit that figures like Barnier expressed from the start?

 

Remain campaigners have sensed “Bregret” in the air ever since 2016, but pollsters do now suggest that around one in five leave voters have changed their minds. Over the past few months, the proportion of voters who want to rejoin the EU has risen to about 58%, while the proportion of those wanting to stay out has fallen to around 42%.

 

Behind the shift, according to analysts, is evidence that voters have become more negative about the economic effects of Brexit, both on the country and on their own personal finances. As recently as 2021, more people thought Brexit would have a beneficial economic effect, whereas the net figure is now -27%. The IMF’s missive last week added grist to that mill.

 

Paul Johnson, director of the Institute for Fiscal Studies, said other countries were not being affected to the same extent as the UK by shortages of labour. The UK labour force, he said, had half a million fewer people than before the pandemic, as a result of people retiring early and fewer EU immigrants.

 

“That’s not affecting any other country in Europe … it’s a particular challenge for us,” he said. The continuing “challenges from Brexit” and the rapid impact of higher interest rates on mortgage costs were also factors, he said.

 

Research by the Centre for European Reform (CER) in December showed that Britain’s economy was 5.5% smaller than it would have been had it remained inside the EU. The UK’s goods trade was 7% lower, and investment 11% down on what it would have been had the remain campaign won in 2016. The Office for Budget Responsibility stands by a prediction that Brexit will cause a long hit to GDP per capita of 4%. Pro-Brexit economic arguments have become thin on the ground.

 

As UK public opinion turns, the attractiveness to voters in other member states of their nations quitting the EU, which rose around the time of the referendum in 2016, has declined markedly. The European Social Survey (ESS), led by City, University of London, found respondents were less likely to want to leave than in 2016-17 in every EU member state for which data was available.

 

Remain campaign veterans believe that the drip, drip of data has persuaded media organisations once reluctant to attribute such negative effects to Brexit to raise more questions. Last Tuesday, the BBC, criticised by some remainers for staying out of the debate for too long, led its news bulletins on the IMF intervention and held a special Brexit debate during which remainer Alastair Campbell was regularly cheered and leaver Jacob Rees-Mogg often jeered.

 

While boasts of Brexit’s positive economic impact have subsided, it would be wrong to say that prominent Brexiters have had a change of heart. The arguments deployed, however, have shifted. Many pro-Brexit figures now readily admit that economic problems are a byproduct, at least for now. Instead of economic boosterism, three broad arguments are deployed: that it is too early to judge Brexit, that it has been implemented badly and that Brexit was only ever a question of sovereignty.

 

Lord Moylan, a Tory peer and former adviser to Boris Johnson, says an economic hit should come as no surprise. “The negotiations were appallingly handled, but as far as Great Britain is concerned, Brexit is now complete,” he says.

 

“Brexit was a constitutional change, and it’s been achieved. We’re not subject to European Union laws and make our own laws. That’s what Brexit is all about, and it has been done. If you leave a customs union, you’re going to trade less. It’s obvious. Why would anybody be surprised about that? Inevitably, it would have an effect on trade. I didn’t think the European Union would be so unpleasant about the whole thing, but obviously I was naive about that.”

 

Brexit was supposed to be the beginning of the hard work. It wasn’t ‘Get Brexit done, and it’s done’

Jeremy Hosking

 

Jeremy Hosking, a former Tory donor who also handed large sums to Vote Leave, lays the blame for Brexit’s progress at the feet of the government. “Like many people with a Conservative disposition, I would say it’s been very disappointing so far, but obviously the politicians and business leaders have had many other things on their mind,” he says.

 

“What I’ve concluded is that we’re living in an era where the politicians aren’t really interested in serving the long-term interests of the people. ‘Brexit’ is now a slogan. ‘Get Brexit done.’ Brexit was supposed to be the beginning of the hard work. It wasn’t ‘Get Brexit done, and it’s done’. There is a read across from this to all other areas of public policy as far as I can see, but nothing is happening. There’s no problem-solving in any dimension. It doesn’t matter whether it’s health, education, trade deals, there’s no progress anywhere.”

 

Lord Edmiston, the Tory donor who gave £1m to the Brexit campaign, said it was never likely to be smooth in the short term and that hiccups were to be expected and we should judge it after a decade. “Brexit for me was a decision about democracy and the ability to make our own laws, control our own borders, and trade with who we wished,” he said. “It was never undertaken as a short-term measure. A change like that after more than 40 years was never going to be achieved without a few bumps in the road.

 

“Given the fact we were immediately plunged into Covid and subsequently the Ukraine war, it is actually surprising how relatively smoothly things have gone. This decision will be best viewed after 10 years have passed.

 

“Other countries like New Zealand and Australia had to make major adjustments to their economies after the EU limited our ability to trade with them. They made those adjustments and came out stronger – so will the UK if we commit to it and stop looking back over our shoulders.”

 

 

Politically, the Brexit effect now spells trouble for Sunak from several directions. Gone is one of the pillars that Tory MPs credit for delivering election success in 2019 – by most accounts, Tory strategists believe that if Brexit is an issue at the local elections, it won’t be to the benefit of their party.

 

Some Brexiters also said that it was the misfiring of Brexit that – inexplicably to many in the party – was keeping Liz Truss relevant. This weekend, the former prime minister will make her first big intervention, heaping pressure on Sunak to cut taxes and deregulate. Despite her complete implosion, some Tories conclude that her high risk, low tax programme is the only logical strategy for making a success of life outside a big trading bloc.

 

“I always thought Brexit had the capacity to hit the existing party system, and Labour ran into that head-first. But the same articulated lorry is now about to collide with the Tory party,” said one veteran Conservative Brexiter.

 

Meanwhile, new Brexit skirmishes are set to break out this week as the plan to remove all EU laws from the statute book is debated in parliament. Soon after that, a deal with the EU over the treatment of Northern Ireland again threatens a fresh battle.

 

Yet the problems emerging with the current Brexit settlement also heap pressure on Keir Starmer and Labour. While the Labour leader has talked about taking on the “Brexit purity cult” in the Tory party, greater evidence of economic damage will increase pressure on him to bring the UK closer to the EU. That risks undoing his largely successful drive to steer his party away from the Brexit splits that caused such problems for Labour at the least election.

 

It all allows Barnier to adopt a more-in-sorrow-than-anger tone as he surveys the continuing fallout, but he adds a warning for remainers who hope that one day an EU return could be contemplated. The further the two parties drift apart, the harder any return will become.

 

“I wish the best for the UK, sincerely,” he says. “I admire this country, with respect for many of the UK’s leaders – first of all, Winston Churchill. I admire the culture of the UK, the capacity to play a role in the world. But Brexit is a lose-lose game … [it] has been, is and will remain a lose-lose game.

 

“The door is open. The difficulty could be that the gap is created, starting from now into the future in our regulations. If there is too large a divergence, it could be more difficult. But once again, this is a choice for the UK.”