Is Brexit done? Or just the next chapter of the psychodrama?
Chris Johns
For many people in the U.K., Rishi Sunak’s recent deal with the EU was cathartic. Plenty of us said:
Thank God it’s done. Now, can we talk about something anything other than Brexit? Maybe even start to deal with the many problems facing the country?
Variants on that theme were heard up and down the country. Sometimes loudly, often in silent prayer. Anyone who thought it all means Brexit is ‘done’ felt nothing but relief.
There is a visceral sense that the British are utterly sick of the Brexit wars. Those still willing to do battle resemble the Japanese soldiers found on remote Pacific islands, long after WW2 ended, still carrying their rusting bayonets. Sadly, there are still a lot of ageing Brexit warriors sitting on the government backbenches. And plenty who happen to own newspapers and fringe TV stations - not a lot of people know this, but the U.K. does have the equivalent of Fox news.
Is it all over? Spoiler alert: no. But that national sigh of relief is worth delving into. It is consistent with opinion polls that show a majority of Britons now think the UK made a mistake leaving the EU. Some actually say they wish to rejoin - that’s a forlorn hope this side of at least a generation.
Here’s Sunak, long before he became Prime Minister, eloquently making the case for the U.K. to leave the Single Market:
Here’s a much more recent vintage of Sunak, now PM, making the case for, er, staying in the Single Market.
He already looks older. But is he wiser? Is he, in fact, one of the many Britons now proclaiming their Brexit regrets? We’ll never know but I’d take that bet.
Brexit has had economic consequences for sure. These are measured in percentages of lost GDP, £50 billion in tax revenues gone missing, decaying infrastructure, dilapidated public spaces, a disappearing stock market and a levelling up agenda that is utterly misnamed (spoiler: the London economy is stagnating).
Brexit has had plenty of other effects. Here’s arch Brexiteer, Daily Mail journalist Sarah Vine, complaining accompanied by the soundtrack of a very tiny violin:
Vine’s words echo those feelings I mentioned at the start of this piece.
I pray Rishi Sunak succeeds so as individuals, and as a nation, we can put this civil war behind us
It’s a worthy sentiment: let’s put an end to conflict, just declare a Brexit ceasefire. Here’s hoping.
We could now explore the intentions of people like Nigel Farage and Mark Francois (backbench Tory MP, chair of the ultra Brexiteering ERG and all-round wing-nut). But such an exploration would lack insight: we know, for sure, that unlike Sunak (maybe) there is no chance of these types ever putting their hands up; they will never surrender. They will cause further trouble. We know all this.
There is the legislation currently going through Parliament that aims to repeal every legacy EU law still on the UK’s statute book. That Sunak is still willing to pursue this (almost) universally loathed ideological nonsense is testament to the need for the PM to toss his ultras considerable quantities of red meat. For a vegan and someone who has (probably) changed his Brexit mind, that’s quite of lot of cognitive dissonance. But nobody gets to be PM these days without being something of a clown, duplicitous, mendacious and able to hold, with conviction, multiple contradictory beliefs. Sunak is undoubtedly a much better Prime Minister than Johnson and may well be a much better human being. He stands out for his attention to detail. I fear that this is all we will end up praising him for.
I’ve written many times, here, here, here and here, about how Britain’s problems run deeper than Brexit, predate Brexit. But Brexit is very much in the mix - a complicated mix, which allows obfuscation and lies by those who still claim Brexit was a good idea.
Because Brexit is, in part, a psychodrama, the important fact is that everyone sniffs a possibility that that we might not have to sit though another interminable episode. Whether or not that is true is, for the short term, irrelevant. For a while, we can cheer up and Sunak may well get a poll boost.
But Brexit will come back to bite Sunak, either via the ultras in his party or just the slow grind of an economy going nowhere. Recession may be avoided this year but any cyclical bounce will still be against a background of an economy that doesn’t invest, doesn’t grow.
One of the newer problems faing the UK is the failure of ‘levelling up’. A key policy of the Johnson era, it was typical of the man: all slogan, no details and precious little action. Mostly grandiose announcements subsequently rowed back. Johnson was warned, slightly facetiously, not to level up the UK by levelling down London and the South East of England. Guess what? Data has recently emerged to suggest that London’s hi-tech, high productivity economy has begun to stagnate.
Here’s Martin Wolf from the FT:
It turns out that the UK has two regional problems, not one, and, as a result, a huge national problem too. The longstanding problem is the relative weakness of areas outside London and the South East. Since the financial crisis of 2007, we see a new one, however, namely the slowdown of these previously dynamic regions. Regional inequality has not become worse since then. Yet this is not because of levelling up. The country is suffering something worse than rising regional inequality: national stagnation, with even the former growth engines spluttering.
One of the reasons for this does, indeed, have nothing to do with Brexit: London’s financial powerhouse, The City, is struggling. This is more a legacy of the financial crisis: banking, in all its forms, isn’t quite what it used to be. Symptomatic of this is the move by many companies to move their stock market listing from New York to London. America has more of an equity, risk taking, long term investing culture.
The FT carries the story here. The likes of CRH and the parent company of Paddy Power are moving the location of their company listings for all sorts of reasons - the FT headline above captures it well. But this seemingly esoteric story is connected to the main reason for Britain’s economic (and therefore social and political) decline: the UK doesn’t invest in itself any more.
What can be done? Rejoining the EU would help but not solve. The problems run much deeper than that.
It is easy to produce a list of sensible ways forward: modernise taxes to raise more revenue with fewer distortions; improve relations with the EU and streamline UK-EU trade, especially in services; liberalise planning rules to create jobs and cheaper, better homes. But all policy wonks and most politicians know this; nothing ever happens.
It is sobering to re-read the LSE’s Growth Commission report of 2017. Many of its proposals were not policy proposals, but institutional reforms to keep the politicians away from policy proposals: Bank of England independence, but for everything. Contemplate the recent accomplishments of Whitehall and Westminster, and you see where the Growth Commission was coming from.
While researching this column, I found a video of the commission’s co-chair, John Van Reenen, in which he described “what we need to do over the next 50 years”. It seemed an impossibly daunting timescale. Then I realised the video had been posted almost exactly 10 years ago. We could have started then. We didn’t; we’ve gone backwards. We could at least start now.
Indeed, we could start now. That seems as likely as Boris Johnson giving me a knighthood. As Sam Freedman says here, today’s front pages neatly summarise the state we are in.
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