Brexit benefits are for the birds


by Sean Rickard

The continuing Brexit disaster has been further exposed with the recent publication of UK-EU trade statistics by the ONS.   The data shows UK goods trade has suffered its steepest five-year fall since comparable records began in 1997.   When compared to other advanced economies, the UK’s weak trade performance is revealed as due to UK-EU trade barriers rather than the increasingly hollow Tory insistence that Covid and energy prices are to blame.   Daily we learn of more Brexit barriers.   British car and cheese exports to Canada are facing tariffs of 6 and a whooping 245 per cent respectively.   Salmon Scotland claims that Brexit is costing salmon producers £100mn a year in lost sales to Europe – ironically many Scottish coastal communities along with their English counterparts voted to leave the EU in the expectation of a better future – while Royal Enfield motorcycles is setting up a Dutch distribution operation to cut the cost of distributing parts to Europe.   

Of greater concern is the observation by the chief executive of the Intercontinental Exchange that since leaving the single market the UK has lost its value as a global trading centre with access to Europe, and its new status of a ‘foreign country’ has made it harder to invest in the UK.   Looking slightly further ahead, the EU’s Carbon Border Adjustment Mechanism (CBAM) i.e., tax, will impact adversely on a range of UK industries exporting to the EU including cement, iron and steel, fertilisers, and electricity.   As it is impossible to determine whether imported electricity comes from clean or dirty energy sources, the effect, according to industry analysts, will be to deter investment in the UK’s offshore wind farms who had planned to export power on very windy days.

Given the continuing disaster of Brexit, a British Chambers of Commerce (BCC) report urging the main political parties to address the consequential trade and investment issues is timely.   As has been pointed out ad nauseam in this blog, the failure to admit, or rather the denial of the true costs of Brexit by both the government and Labour is becoming untenable and is an affront to a properly functioning democracy.   Labour recoils from raising the issue before the election for fear that the Tories and the Brexit supporting right-wing media will accuse Starmer of planning to rejoin the EU – I wish.   One thing is for sure, the current political silence will not endure post the election, as outside the single market Labour’s prospects for a credible growth strategy are close to zero.

Unfortunately, the country is going to pay a heavy price for this pre-election purdah.   The Tories may be a busted flush; their belief that Brexit would keep them in power and united has delivered precisely the opposite.   However, as the government in waiting Labour should be developing its policies.   I’m sure it is planning a more positive relationship with the EU to gain some quick wins e.g., alignment with EU veterinary standards, a return to Erasmus programme – moves supported by the pro-EU, Conservative European Forum – but what is needed is a plausible pathway to EU membership.   Brexiters may have fantasied about Britain returning to its 19th century status but for all but ideologs or the ignorant the notion that departure from the EU would boost opportunities for growth enhancing trade deals is now for the birds.   I cling to the hope that Labour knows, or will soon realise, that unless its red lines regarding Brexit are removed, far from becoming the fastest growing economy in the G7, the pressure on UK households’ living standards will continue.  

Beyond economics, a competent British government must recognise that the world has changed out of all recognition since the 2016 referendum.   The reality now is an aggressively emboldened Russia, a fast-emerging East-West cold war with China and the risk of a highly unstable Trump presidency.   In this new world, the faster the UK returns to the cooperation and influence it enjoyed as an EU member the better.   By design or default, Labour’s broad-based emphasis on security including not only military cooperation and a return to Europol with its criminal data and European arrest warrants but also EU wide supply chains and improved access to critical raw materials, provides the vehicle.   Building a path back to EU membership on the basis of wide-ranging security is likely to find support in many quarters e.g., right-wing media, trade unions and business leaders.   As the East-West cold war ‘hots’ up so global supply chains are switching to near or ‘friendly’ sourcing, much to the benefit of the EU and the disadvantage of an isolated UK.   For the Tories, Brexit involves the denial of reality but faced with the hard choices of reality, Starmer would not be the first prime minister to embrace policies previously ruled out.  

Effective governance is to choose wisely.   The first step would be developing a strategic approach to the EU that has been missing since 2016.    This would involve rebuilding the trust of our erstwhile partners so foolishly squandered by Brexit e.g., ceding some jurisdiction to the European Court of Justice to facilitate common standards and regulations.   Thus, would start an incremental process that hopefully would culminate during a Labour government’s second term with a manifesto commitment to rejoin the EU.   The polls currently show that a majority favour rejoining, but it is unlikely that Brussels will be prepared to countenance an application until it was sure it reflected the overwhelming will of the population.   I am putting my faith in Starmer that once elected, almost certainly with a large majority, he would find the courage of its convictions and work tenaciously to increase the 60 per cent of voters who now wish to rejoin.   Transparency regarding the continuing economic costs of Brexit will I am certain speed progress towards an overpowering majority.   I am buoyed by the fact that even, the admittedly small numbers, who watch the Eurosceptic GB News, recently voted crushingly to reverse the disastrous misjudgement of Brexit.   


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