Its the next election stupid


by Sean Rickard

Brexit lies behind the coming decimation of the Tory party.   All governments seeking re-election trumpet their successes; thus, we can conclude that the Tories – despite being led by a prime minister who described himself as ‘the original Brexiteer’ – agree with Nigel Farage that getting ‘Brexit Done’ was a failure.   Despite desperate efforts by Tory and Labour politicians to avoid the issue it effects reverberate, exacerbating voters’ concerns regarding the economy’s lacklustre performance, the loss of immigration control as well as the chaos and distrust of the Tory government.   Voters are increasingly aware that membership of the EU was not the cause of the country’s problems regarding investment, productivity and international competitiveness.  

Farage, like all populists, is happy to dissemble and repeat statements he should know are untrue in order to capture the support of that proportion of the electorate whose insecurities and prejudices are susceptible to manipulation.   More generally, voters know in their bones they were misled over Brexit – only a third now believe it was right to leave the EU – – and that leaving the EU has reduced living standards.   The claim by Farage and Tory idealogues that Brexit would deliver a radically smaller state, large scale deregulation, and buccaneering free trade has been comprehensively trashed.   Three insignificant trade deals, limited divergence from EU regulation, increased business costs and much reduced investment, has proved the reality.

Farage is fond of saying that small businesses are the backbone of the economy, yet these have been a major victim of Brexit.   The Director General of the British Chambers of Commerce, which represents some 70,000 largely small-scale business, told the group’s annual conference that EU-UK trade and cooperation wasn’t working for its members and politicians ‘must stop walking on eggshells and start saying it how it is.’   Analysis published by the London School of Economics found that 20,000 small businesses had stopped exporting to the EU as a result of red tape created by the UK exiting the single market.

The DG has no doubt concluded that she will soon be dealing with a Labour government and, like many in the business community and beyond, is frustrated by Starmer’s stance on Europe.   Credible experts are agreed; Labour’s ‘make Brexit work’ mantra alongside ruling out rejoining the Single Market and the Customs Union is a chimera.   The Labour manifesto sheds no light on the detail of the mantra and the economic gains from a hoped for veterinary deal and possible sectoral deals are minimal.   Closer integration with the EU will only come with closer alignment to EU rules and regulations and free movement.   The EU has already offered a deal to enable young people to live and work in each other’s countries widely supported by businesses and universities which Labour has currently ruled out, for fear of being portrayed as ‘anti-Brexit’ by a largely right-leaning press.

That said, I am sure that over the course of the next parliament, public pressure for closer alignment to the EU will grow.   As the pains of the Brexit political traumas diminish, there is good reason to believe that re-joining the single market, and implicitly the EU, will rise up the political agenda.    The more so as without such action, Starmer can never achieve his aim of sustaining a higher rate of economic growth.   Of relevance here will be the views of newly elected MPs, not only in the Labour Party but also the Liberal Democrats, SNP and Plaid Cymru.   All want to see a much closer relationship with the EU and the manifestos of the two nationalist parties make a particular point regarding the damage done to the Scottish and Welsh economies by Brexit.    

In game theory it is often the ex post rather than the ex ante game that matters and this insight applies to elections.   A Starmer government will have to confront the inescapable connection between British living standards and the country’s relationship with Europe and Parliament is likely to be only one of a number of institutions seeking a closer relationship.   UK-EU relations have not attracted much interest in Brussels since the terms of Britain’s departure were settled, but since 2021 closer security and economic ties are being presaged by significant geopolitical shifts.   Notably, the invasion of Ukraine but also the retreat to ‘friendly’ shoring by global supply chains in response to the re-emergence of East-West schism.  

How Labour responds will be a defining totem of the next parliament.   Given the parlous state of the UK economy, revisiting the Trade and Cooperation Agreement is a priority, but Starmer has – for now – ruled out rejoining the single market/custom union.   Given the interdependence of UK living standards and membership of the single market this position cannot pertain.   Britain’s hosting of the European Political Community in July offers the opportunity to reset relations and history shows that the EU is likely to respond positively provided its overarching interests are protected.   The first step would be greater cooperation in intelligence and defence providing a natural step from physical to economic security.   Britain could facilitate the latter by offering further regulatory alignment, more oversight by the European Court of Justice and joining the Pan-Euro-Mediterranean convention, but the potential benefits are limited.  

The real prize, rejoining the EU, must wait a little longer until the economic damage of Brexit is overwhelming acknowledged by voters, possibly towards the latter stages of the next Parliament.   The tone and sincerity of the new government and voters’ attitude towards Europe will be observed carefully in Brussels and national capitals, hopefully creating mutual support for rejoining as we approach the election after next.   History suggests that second terms are often a prime minister’s most dramatic as they begin to think about their legacy.   So far, Starmer’s political judgment has been acute.   For all the reasons set out above by 2029 the time will, I believe, be ripe for raising the issue of re-joining.   It is my sincere hope that prime minister Starmer seizes the opportunity.  


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