This blogpost was written on Sat, November 2nd, 2019. The next BEERG Brexit blogpost will be in mid-December, after the results of the UK general election are known
The granting of an extension by the EU until January 31 next and the calling of a UK general election has put the Brexit process on hold for now. How Brexit proceeds, if indeed it does, will be decided on December 12, the day the UK votes in its third general election in four years.
At the time of writing the outcome is impossible to predict. Election campaigns are strange events. The unexpected can happen during the next six weeks, and probably will. Trying to predict the outcome of this election based on what happened in 2017 is a fool´s game.
This Briefing has always been about Brexit and what Brexit means for businesses and their employees, whether based in the UK or elsewhere in the EU. We do not see it as our role to comment on UK politics more widely or to express particular political preferences.
For that reason, we are pausing this Briefing for the duration of the general election campaign.
Once the results of the general election are known, we will start writing again about the Brexit process which, as we suggest elsewhere in this Briefing, will never end. Writing about Brexit is a labour of Sisyphus.
However, our decision to sign off until mid-December, presents us with an opportunity to offer some thoughts on Brexit and the Brexit process and the light they have shone on the UK over the past three years.
- Why Brexit?
Brexit appears to have its origins in a particular English obsession with threats to national identity, driven by worries about the UK´s diminished power and influence in the world after the ending of empire. The loss still grates, a slow, throbbing pain that just will not go away.
This obsession often found voice in speeches and writings about the loss of sovereignty and control. In 1962, the then Labour leader, Hugh Gaitskell, bemoaned the fact that Common Market membership would mean the end of a thousand years of history, giving rise to one strand in this narrative of loss. Enoch Powell´s notorious anti-immigration “rivers of blood” speech in 1968 still echoes down the years. Thatcher´s Bruges comments in 1988 about the dangers of a European “socialist super state” overwhelming “liberal” Britain is often seen as the moment that the long march to Brexit began.
All of this came together in the 2016 referendum slogan, “Take back Control”. Not only did these words appeal to English nationalists, but they also resonated with “left behind” working class communities who not only found themselves on the wrong side of globalisation but had also suffered years of UK-government imposed austerity.
You might call it a coalition of the “dispossessed”. On the one hand those who felt that they had been dispossessed of British “greatness”. On the other, those who have been dispossessed of life chances and often struggled to make it through the week. It proved to be a toxic and powerful mix.
And yet, Brexit just squeaked home on a 52%-48% split of those who voted, with the 52% representing just 37% of the total electorate. Small margins often herald big trouble.
- Brexiteers did not know what they were doing before the referendum
While Brexit ideologues fretted down the years about the loss of control, their focus was often on “big-ticket” issues such as the Maastricht or Lisbon Treaties, where they perceived sovereignty to be in play. Perhaps because it was originally driven by Thatcher, they failed to notice just how deeply the EU´s internal market was remaking the European economy, knitting together cities, regions and countries through cross-cutting, just-in-time supply chains.
On the back of the internal market, originally mainly concerned with manufactured goods, grew an often very imperfect market in services such as finance, consultancy, legal advice, the creative arts and the rest. The UK built a huge stake in both markets.
Daily life was also “integrating” across Europe with such things as the European Health Insurance Card (EHIC), pet passports, an end to phone roaming charges, mutual recognition of driving licences, the liberalisation of air travel and, of course, and the great gift of freedom of movement. Freedom of movement allows European citizens to go live, work, study and love and make a life for themselves anywhere within the 28 member states. Brexiteers have reduced freedom of movement to “Europeans invading England”. They have little idea what they are throwing away.
Looking back at the referendum campaign in 2016, what strikes me most about the Brexiteer arguments is what might be called their reductionism. The totality of the UK´s relationship with the EU, they seemed to believe, could be reduced to trade in manufactured goods and membership could easily be replaced with a quickly negotiated trade agreement. After voting to leave, the UK would hold all the cards and would be able to dictate terms. “Great” and “Britain” would soon be reunited.
Voices to the contrary suggesting that unpicking close on fifty years of deep integration would be incredibly difficult and would come at a severe economic price were dismissed as nothing more than “Project Fear”. “Know Nothingism”, and wanting to know nothing, in many ways best describes the Leave campaign. There would be no downsides, only sunny uplands and anyone who said different soon became branded as an “enemies of the people”.
- Nor did they know what they were doing afterwards
Theresa May was a “light remainer” who quickly transformed into a “devout leaver” when she became prime minister. But there was no Brexit plan for her work to, no roadmap to a new relationship with the EU. “Brexit means Brexit” became her holding mantra while she tried to work out what to do. She soon discovered that this was a next to an impossible task for the simple reason that there was no agreement among Brexiteers as to what Brexit meant. This still holds true today.
As I wrote, Nigel Farage is busy denouncing Johnson’s withdrawal agreement as “not true Brexit”. When it comes to “true Brexit” and separating the UK from the EU Farage is just one brick short of demanding that the UK “build that wall”.
In the early days of May, the UK struggled with the question: what should its relationship with the EU be after it had left?
Should the UK just step outside the door and develop a Norway/EEA single market relationship with the EU? Perhaps adding an EFTA customs union arrangement? But this would require acceptance of freedom of movement as well as depriving the UK of any say in the development of single market rules or the negotiation of EU trade deals.
All of this would mean that “taking back control” amounted to giving up control. The word “vassalage” became the mot du jour. Further, this vassalage would deprive the UK of the ability to cut its own global trade deals, which by this time has become the holy grail of Brexit.
But a more distant relationship could mean tariffs and quotas and delays at borders, all of which would shred the just-in-time supply lines built up within the internal/single market.
That the government had no real idea what it was doing is well caught in Iain Anderson´s book F**K Business: The Business of Brexit. Anderson describes a UK business community in despair at the damage Brexit will bring and the cluelessness of ministers in trying to deal with it. Anderson also documents the repeated efforts of the financial sector to try to find ways of retaining the benefits of EU membership, “passporting”, from the outside. All to no avail. Cake and eat it was never going to be on the menu.
In the end, in a series of speeches, May decided that Brexit meant the UK being outside the EU´s single market, customs union, and the jurisdiction of the European Court. Yet, at the same time she wanted to maintain seamless, frictionless trade with the EU. “Please sir, could the UK have all the benefits of EU membership with none of the costs and obligations?”.
- Brexit will never be over
The commentator Roland Smith, himself an ex-Brexiteer, has categorised Brexit ideology, if that is not too strong a word, as “simplism”, a belief that leaving the EU would be simple. Simplism is a denial of the complexity of reality. “Take back control” catches the essence of simplism. All the UK had to do was to vote to leave the EU and control would fall to the UK from the “EU empire” like a ripe apple from a tree.
“Get Brexit Done”, an invocation never far from Boris Johnson´s lips, is another example of simplism. It is the belief that Brexit is a one-off event, a time and date in the calendar after which the UK will forever be free of control from Brussels. A sort of “now you see it, now you don´t” and, like all magic tricks, an illusion.
Brexit will never be done. Ever. There will never come a day when negotiations between the EU and the UK are finished. For the next five to ten years there will be intensive discussions all-day, every-day as the UK works to replace all the benefits that flow from EU membership with less beneficial, third-country agreements. People will still need to travel, planes to fly, trucks to roll, goods to move and services to be delivered. These things can only happen when there are rules in place.
There are rules in place today governing all these things. It is called EU membership. But the Johnson government has made it clear that it wants to diverge from these rules, to “go its own way”. Divergence creates barriers and barriers create costs. The EU will rightly take the view that the bulk of the costs arising from divergence should fall on the UK.
After all, it started the fire. The UK will, rationally from its point of view, push back against this cost allocation. When negotiations are about allocating pain, rather than sharing gain, they tend to be nasty and brutal. There will be no early and easy wins for the UK. Arsonists do not get rewarded.
All the time the issues under discussion between the UK and the EU will feed back into UK politics. As the benefits of EU membership slip away and the paperwork and bureaucracy that will replace free movement and free trade seep into daily life those who pushed for Brexit will increasingly find themselves in the crosshairs of public anger.
Claims that sovereignty is worth any price will get short shrift from all but the most fanatical. Who wants to have to pay for a visa to go on holidays to Spain and buy health insurance before you travel or buy a carnet to allow you to take your laptop or iPad with you when you didn´t have to do so before? The UK government “Get Ready for Brexit” alerts are already warning people about such things.
- No trade deal with a level-playing field
The more the UK wishes to diverge from EU standards the longer and tougher the negotiations will be. Michael Barnier has spelt it out: if the UK wants a no-tariff, no-quotas deal then it will have to accept no dumping. No dumping means no undercutting EU labour and environmental laws, as well as product standards and, in all likelihood, financial sector regulations.
If the UK wants to become “Singapore-upon-Thames” then so be it, but it will find its access to the EU´s internal market severely curtailed as a result. No one is going to help a competitor, especially a competitor who was once part of your team but left because of its dislike for your economic and social model. Former friends can be the worst of enemies.
Cutting deals with other countries to compensate for the loss of EU trade will not be easy. In an interview with Nigel Farage on October 31, President Trump made it clear that aspects of the agreement Johnson had negotiated with the EU would stand in the way of a UK-US trade deal.
Choices will have to be made. Does the UK turn east to Europe or west to the US? No matter the government in power and the choices made, these choices will be bitterly contested. Trade and trade choices will become politically toxic. Government is going to become a lot harder. The divisive politics of the Withdrawal Agreement is just the prelude to the main act.
- The UK finds it has a land border
It came as something of a shock to many in the UK to discover that, after Brexit, it would have a land border with the EU. And not just any land border at that. A land border on the island of Ireland between Northern Ireland, part of the United Kingdom of Great Britain and Northern Ireland, and Ireland, the republic which would remain part of the EU.
Elsewhere in the EU land borders are just that: land borders. But on the island of Ireland “the border” carries the heavy weight of a bitter, contested and divisive politics that, until recently, had seen violent death and destruction as daily realities. The Belfast Agreement, also known as the Good Friday Agreement, has helped bring an end to that with a peace that walks daily on eggshells and with those who would be once again gunmen lurking close by in the shadows.
Joint Irish and UK membership of the EU had made possible the elimination of customs and commercial borders between the two parts of the island. Ireland, Northern Ireland and the UK had long had a common travel area agreement in place designed to allow people to pass freely without passport controls. The Good Friday Agreement saw the ending of security controls at and around the border. Brexit threatened to tear all of that apart. If the UK was outside the EU´s customs union and single market, then borders were inevitable.
New borders on the island of Ireland could see a return to old ways. So, from the start, the EU made no new border infrastructure on the island one of its red lines. This led, first, to the Northern Ireland backstop, which would see it stay in the EU´s single market and customs union, irrespective of whatever deal the UK did with the EU. Then to the UK-wide backstop to avoid an internal border between Northern Ireland and the UK. Which led to the ousting of Theresa May as Brexiteers railed against the UK being held “captive” in the EU´s custom union, threatening the holy grail of global trade deals.
When Johnson became prime minister, he solved the issue by agreeing to the border in the Irish sea that May had twisted and turned to avoid. May was prepared to sacrifice “true” Brexit to save the “precious, precious Union”. Johnson was willing to undermine the Union to deliver Brexit. The DUP, which had propped up the May government and though Johnson was a friend of Ulster, was gutted. Betrayal of friends comes easier to some than to others.
- I can’t believe it
A last observation. From reading much of what has been written about Brexit by UK commentators (journalists, academics, politicians and bloggers) over the past three years I am left with the impression that, in the words of the TV character, Victor Meldrum, they “can´t believe it”.
They just can´t accept that after Brexit the UK will be outside the EU, that it will be “a third country”, with all the loss of influence within Europe that this brings. They are in denial about this reality. “The UK is too big, too important; Europe will still need us; the EU should not be so inflexible: a way must be found for the UK to still have a voice in matters” all speak to the same belief: the UK is “exceptional”, and a way should be found to accommodate this exceptionalism.
As the Prime Minister of Luxembourg Xavier Bettel once put it about the UK: ‘Before they were in with a lot of opt-outs, now they are out and want a lot of opt-ins’.
Sitting in a lonely chair in a cold corridor while other in the room behind you decide matters is not the place to be. But that´s where the UK will be. There is no seat just inside the door for ex-members. In the end, May was right. Brexit does mean Brexit.
As long as the UK political class and commentariat continue to believe in UK exceptionalism the longer its relationship with the EU will remain fractured and tortured. Only when the UK comes to accept that it is just Britain, a mid-sized European country, and not “Great Britain” entitled to a global role beyond what its resources justify, will the demons of Brexit be slain.
It could take a long time.