The death of the UK’s Brexit dream - OPINION

  04 July 2024    Read: 627
  The death of the UK’s Brexit dream -   OPINION

British voters head to the polls Thursday for their first general election outside the European Union. But in so many ways, the Brexit dream has already died.

All the key Vote Leave characters have left the stage. Five years after winning a landslide election Boris Johnson is out of parliament, making millions from speeches and newspaper columns. Michael Gove has quit politics rather than suffer life in opposition. Dominic Cummings spends his time writing blogs about Dostoevsky, TikTok and the CIA.

As the architects of Britain’s departure from the EU contemplate a decade out of power, the country they envisaged during the 2016 referendum campaign looks further away than ever.

Radical plans to tear EU regulations off Britain’s statute books en masse have already been abandoned. The benefits of buccaneering free trade agreements (FTAs) have proved elusive. Britain's public services, far from receiving a promised boost, have in many cases almost stopped working. The number of people moving to Britain from abroad is higher than ever.

It’s not what advocates of Leave had in mind. And there are good reasons to suspect that a Brexit high-water mark has now been reached.

Keir Starmer’s Labour Party — seemingly on the verge of winning a historic majority in the July 4 election — has pledged to leave the current Brexit settlement largely intact. Ardent Remainers hoping Britain might re-enter the EU under his leadership are likely to be disappointed. Labour's slogan is “Make Brexit Work.”

But Brexiteers don’t trust Starmer — a social democrat who previously campaigned for a second referendum he hoped would reverse Brexit — to finish the job. In fact, they don't trust him, full stop.

“I'm afraid the Labour Party doesn't have the right instincts,” said Steve Baker, the longtime ringleader of Tory Euroskeptic lawmakers in parliament, and currently a government minister. “It’s likely to just mess things up.”

‘What price will Labour pay?’

As the election has drawn closer, Labour has hinted it would be open to signing up to EU rules in sectors like agriculture, food and chemicals.

“I don’t think anyone voted Leave because they were not happy that chemicals regulations were the same across Europe,” the opposition’s finance chief, Shadow Chancellor Rachel Reeves, told the FT last month.

Daniel Hannan, a Tory MEP for more than two decades and ardent Euroskeptic, fears Labour will go further. (He also protests that his 2016 book advocating Brexit includes “a lengthy section” on the pitfalls of EU-wide chemicals regulation.)

“Note that Labour’s plan is not for mutual recognition — but a proposal for Britain to follow whatever the EU is doing,” Hannan said. “Remember how Keir Starmer kept demanding a second referendum? ... The only question is what price Labour will pay to get back into [European Commission President] Ursula von der Leyen's good books.”

Hannan expects Labour to “give up on deregulation” entirely and take the U.K. “back into EU standardization.” As a result, he said, efforts to sign more post-Brexit free trade agreements around the world would be halted.

The free trade vision

Striking FTAs with non-EU countries was one of the big promises of Brexit — and the most prominent economic justification for leaving the EU’s customs union and regulatory orbit.

“The argument was more or less that yes, we will trade less with the EU, but this will be compensated for by more trade with the wider world,” said Joël Reland, a research fellow at the UK in a Changing Europe think tank.

Have these agreements been worth it? “The short answer is no,” said Nicolò Tamberi, an economist at the University of Sussex Centre for Inclusive Trade Policy.

Most of the agreements signed since leaving the EU, Tamberi noted, are “replacement agreements continuing EU agreements” such as those with South Korea and Mexico. The genuinely new deals, with Australia or New Zealand, are with “small and very far away countries that are “not natural trade partners of the U.K. and cannot add very much.”

Indeed the official numbers are somewhat embarrassing. The U.K. government's own Office for Budget Responsibility believes leaving the EU will hit U.K. GDP by around 4 percent over the long term, a figure it has reconfirmed as recently as March 2024.

By contrast, the U.K. government’s own estimates put the value of the new post-Brexit trade agreement with Australia at just 0.08 percent of U.K. GDP. The New Zealand deal is even smaller, clocking in at 0.03 percent. A flagship Indo-Pacific deal, CPTPP, is worth 0.04 percent. These are marginal gains, at best.

“I think on those premises, the argument has fundamentally failed,” Reland said. “They by no means compensate for what has been lost.”

Government ministers appear to have recognized this, at least implicitly.

Kemi Badenoch, the U.K.’s Brexit-backing business and trade secretary, said when she started her job that her office would stop being a de facto “Department for Free Trade Agreements.” She dialled back the hunt for new FTAs and focused officials on striking fewer, better deals — an agenda which has proved no less challenging.

Badenoch and Prime Minister Rishi Sunak have also reluctantly accepted that one long-promised prize of Brexit is unlikely to happen any time soon: a trade deal with the United States. The agreement was the victim of political change in Washington, but also fears on this side of the Atlantic that Brits could be subjected to such American delicacies as chlorine-washed chicken and hormone-fed beef.

“I cannot see any world in which a Labour government signs an FTA with the United States,” Reland said. “It is one of the things that most Conservative prime ministers would dream of — and even they have been unable to do it. The political barriers are too strong in terms of what you have to accept with U.S. regulatory standards.”

This disconnect between what the leaders of the Brexit movement thought leaving was about and what the British public will actually live with has been a key tension since 2016 — and one that has scuppered many a vision of the future.

“There was this quite big emphasis on sovereignty and regulatory freedom in the campaign and certainly amongst politicians who campaigned for Brexit, but their perception of what Brexit meant was quite different to the general public’s,” Reland said.

“If you look at public attitudes towards regulation in general, people support high standards in almost all areas.”


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