As buyers’ remorse begins to stalk even fiery Brexiters, they can no longer indulge in fantasy | Will hutton
Brexit does not work. We were sold a fake flyer. Businesses, especially small and medium-sized ones, are in shock. They absorb unwanted costs; pay hidden tariffs; undergo previously avoidable controls on exports; moving factories, warehouses and offices to the EU; layoffs of workers and haemorrhaging orders. Children’s school trips to and from Europe have collapsed. It takes months to get a visa. British science remains outside the EU’s Horizon program, the world’s largest international science program. So it continues.
Equally important, centuries of British political art, aimed at forging alliances in Europe with the constellation of countries best suited to our interests, have been shattered. British leaders, from Pitt and Palmerston to Churchill, have all understood the vital need to engage with Europe. Now the Irish taoiseach, Micheál Martin, or the French president, Emmanuel Macron, are considerably strengthened, safe in the knowledge that they have the whole EU behind them. Whether resolving the cross-Channel migrant crisis or joining Horizon, belligerent chauvinism isn’t just crass – it has no hope of achieving the results we want. Britain is suddenly diminished, even though our Brexit leaders have yet to realize how small Britain has become.
These realities cannot be disguised any longer. Brexit Minister David Frost felt the need at Margaret Thatcher’s one-day trade conference last week to argue that success, clearly elusive, would need Britain to overcome “the forces of entropy, laziness, interest ”, his blah meaning despair and siege. “Earned interest” is nothing more than businesses baffled by rising costs and diminishing opportunities. The SpectatorEditor-in-chief Fraser Nelson, who previously chaired a debate between Vince Cable and Brexiter veteran Daniel Hannan, admitted in a Telegraph column titled “Was I right to support Brexit?” That he found himself challenging Hannan more than Cable. Where were the sunny highlands we were promised? From global Britain to the unleashed freedom to ‘liberalize, innovate and grow’, the Brexit project was sinking. Even Keir Starmer finally emboldened himself at the CBI conference to start exploiting such fertile ground; Labor had a plan to make Brexit work, which the government clearly did not have, he argued.
He tiptoes around the edges. The heart of the matter is that the government has become so entrenched on all European issues, and therefore so absolutist on sovereignty, that it has become trapped in successive self-destructive positions.
In an important assessment of the EU-UK Trade and Cooperation Agreement (ACT) – the much-vaunted ‘of’ – Cambridge academics Catherine Barnard and Emilija Leinarte observe that with regard to trade in goods ( the agreement dates from the 19th century, it practically ignores services), the ATT is essentially nothing more than minimalist terms of the World Trade Organization (WTO), even organized in chapter titles of the WTO. Apart from the Northern Ireland Protocol, it bears no trace of the single market, nor of any infringements of “sovereignty” that its judgment could entail.
So all the problems. Of course, there are cumbersome and costly health checks on exports of live shellfish to cheese flavored crisps, as is the case with any exporter outside the EU single market. Lord Frost is clearly in the dark, but officials have launched proposals for uniquely British safety regulations and certification for industries as diverse as chemicals and construction.
But industries argue it’s economically stupid: for example, the chemical industry asks why pay for separate UK registration and certification for dangerous chemicals when they already pay for the EU gold standard under which it will produce anyway? Why not just accept European certification?
The UK financial services industry is increasingly concerned. The TCA does not provide any provision for banks to sell their services within the EU; Last week, the EU said it wanted all banking activity in Europe to be backed by adequate capital, essentially ending cross-selling from London. Bankers are not fleeing Britain, but their numbers are steadily increasing. London’s financial markets currently match New York’s in depth and liquidity; each bank that transfers part of its activities to the EU weakens this depth.
Cumulatively, it adds up. In the first six months of this year, exports to the EU fell 13.1%, imports fell 24.8%, according to Channel 4 Dispatches. Our children and young people are losers too: no chance to study under the Erasmus program or to work in the EU hospitality and leisure sectors. Likewise, the 45,000 EU au pairs or some 750,000 EU schoolchildren who came to Britain each year are disappearing, deterred by onerous passport and immigration rules. The Interior Ministry said FT Journalist Peter Foster in response to his report of a school trip to the EU that he welcomed cultural exchanges with “other nations”, so central to Europe that he could not pronounce “EU”.
After the brutal unilateral exit of the United States from Afghanistan, it is obvious that the United Kingdom must have a European dimension for our defense; it’s the same story about cybersecurity or international crime. Everything is paralyzed by the fetishization of sovereignty, the prickly posture it induces and the absurd proposition that Australia and Mexico are as close and as important to us as France and Germany.
Britain must engage with the continent of which it is a part. It’s to find practical ways of doing it here and now – fixing a broken Brexit – that an independent commission on UK-EU relations is launching tomorrow. (Full declaration: I am a member.) The prosperity and even the security of our country are threatened; there must be a rally around workable plans for better agreements on mobility, on product safety and standards, on trade in services, on safety and many other things.
What must not happen is that we dig deeper into the hole we are already in.