Cold, hard self-interest will force even Keir Starmer to embrace the opportunities of Brexit
Can the promise of Brexit be salvaged? After five wasted years, have we completely abandoned the idea of using our new liberties to make this country wealthier?
We have so far shown a stunning lack of ambition. Free to craft our own energy policy, we decarbonised so hurriedly that our electricity is pricier now than when we were members. Free to reduce our VAT, we instead extended it to school fees, becoming the only country in the developed world (with the partial exception of New Zealand) not to treat education as a public good. Free to sign trade deals, we cowered from chlorinated chicken.
Perhaps we are no longer the people we were. Perhaps our more adventurous ancestors emigrated, leaving behind those who preferred security to enterprise, comfort to risk. Perhaps the genes of Drake, Cook and Scott are these days more thickly clustered in Australia and North America. It would certainly explain why those places are surging ahead of us in terms of GDP per head.
But I think there is a more prosaic explanation. The early setbacks for Brexit, whose fifth anniversary falls this week, were due to unforeseeable but not irreversible accidents. We might yet become a more prosperous, agile and competitive nation. And the first steps could be taken, believe it or not, by this Labour government.
The culture war that followed the referendum made it hard to talk honestly about Brexit. When I write about missed opportunities, some Leavers think I am letting the side down, and some Remainers pounce as if I had said that the whole thing was a bad idea.
The idea that Brexit could never have worked was vividly expressed in a 2018 tweet by the columnist Hugo Rifkind: “The best way to understand Theresa May’s predicament is to imagine that 52 per cent of Britain had voted that the Government should build a submarine out of cheese.”
Hugo’s Cheese Submarine Thesis became global. “May und das U-Boot aus Käse” was a headline in Süddeutsche Zeitung, while Paris Match excitedly told its readers about the “sous-marin en fromage”.
Cheese Submarinism is the official stance of Europhiles on both sides of the Channel. Those who claim that Brexit could have been done differently are, we are told, deluding themselves.
This is nonsense. Most of the world’s non-EU countries are outgrowing the trade bloc. Britain is no exception, especially when measured against comparable Western European states. But that is hardly a high bar. Why have we not leapt ahead of them? Let’s start with Theresa May. This is awkward, because the former PM has just moved into the office opposite mine and, when we pass in the corridor, her eyes become as hard and sharp as two awls.
I don’t blame her after what I wrote when I was trying to persuade Conservative MPs to dump her.
I remain of the view that it would have been better for all concerned – for her especially – had she resigned after throwing away the Tory majority in 2017, a needless election which makes Rishi Sunak’s early poll look like a strategic masterstroke.
May was dutiful and diligent, but the accident that made her prime minister led to a series of errors that no one could reasonably have seen coming. She triggered Article 50 with no plan in place, largely because she wanted something to say at her party conference. She threw away her strongest cards by agreeing to the Eurocrats’ sequencing, meaning that their concerns about money, British competitiveness and Ireland were settled before the trade talks began. She hung back from recognising the rights of settled EU nationals, perhaps feeling she had to prove her toughness after voting Remain.
Worst of all, she lost the unlosable 2017 election. From that moment on, most MPs were anti-Brexit, and they made sure Brussels knew it. Exponents of cheese submarinism ignore the fact that MPs promised Eurocrats that Britain would not leave without the EU’s permission (“we will not allow a no-deal Brexit”). In 2019, the Commons made that position law. How could anyone then expect decent withdrawal terms?
None of these things was predictable. Neither was the squandering of half a trillion pounds in a hysterical over-reaction to the pandemic. The day that Brexit took effect, January 31 2020, was the day that the first two cases of Covid were confirmed in Britain.
Ever since, bad faith Euro-nostalgists have conflated the two phenomena, attributing the rises in taxes, prices and debt to changes in our trading patterns rather than to the fact that we consumed without producing for the better part of two years.
The lockdown made people look to the state for every rise in life. Labour was elected as demand for spending was increasing and as the capacity to meet it was expiring.
Which brings us to the mistakes of the current government – mistakes that not even the most fervent U-Boot theorists try to attribute to Brexit – notably the decision to expand public-sector jobs by taxing private-sector jobs.
And yet, however far we have fallen behind the US, we have outperformed France, Germany and Italy. Which is beginning to prompt even some government officials to ask whether remaining tied to their economic model is sensible.
I have noticed a new tone from ministers over the past month. They talk about the benefits of doing things differently in such areas as financial services. Sir Keir Starmer boasts of diverging from EU rules on artificial intelligence so that we can lead the world (which we won’t while we have such high commercial energy prices, but that’s another story).
In Davos last week, the Chancellor, Rachel Reeves, talked up the benefits of a trade deal with the United States. I can’t imagine she enjoys cosying up to Donald Trump. But, if the alternative is facing the 10 or 20 per cent general tariff with which he is threatening the EU, she will have little choice.
Inch by inch, Britain is being pulled by economic reality towards the parts of the world that are growing. Once trade deals with India and the US complement our membership of the Pacific trade nexus, the CPTPP, the idea of realigning with EU standards will look not just nostalgic but cultish.
None of this is to argue against practical links with our neighbours. The culture war that has smouldered since 2016 burst into flame again last week when Maroš Šefčovič, the Commission Vice-President, suggested that Britain join the Pan-Euro-Mediterranean Convention (PEM), a technical agreement that eases rules of origin for trade among countries in the EU, European Free Trade Association, eastern Europe and parts of north Africa and the Middle East.
Immediately, Conservatives were denouncing “membership through the back door” while Lib Dems were exulting in Brussels being “receptive to the UK joining the Customs Union”. But the PEM is not a customs union (something which, for the avoidance of doubt, the UK, as a global trading nation, should not join). Are we really going to oppose, on principle and without looking at it, anything containing the word “Euro”?
Consider the proposal to allow British and European under-30s to work in each other’s countries. It would bring some economic benefits, since EU nationals of that age are net tax contributors. We have similar schemes, not only with Australia and Canada, but with such countries as South Korea and Uruguay. Equally, we can live happily without it. But let’s not pretend that this is full-on free movement and that, if the EU were prepared to pay a high-enough price to get such a scheme – lifting checks on goods in Northern Ireland, for example – we would still not countenance it.
It comes down to confidence. When we have diverged from the EU, on vaccine procurement for example, we have been vindicated. But the fretful and stubborn positions we assumed under May linger. We hang back from deregulation. We dismiss basic economics as “Singapore-on-Thames”.
We will carry on in this vein until the money runs out. At which point, just as after the 1976 IMF bailout, it will be Labour ministers who are forced to begin the repair work. Now, as then, the crisis will jolt us from our torpor.