In the light of all the propaganda, no doubt some people were persuaded by the slogan’Get Brexit done’, to change their vote at the last general election, imagining that, after Brexit, things would change for the better.
On the day the UK officially left the EU, 31 January 2020, Britain’s exit was presented by Boris Johnson as a personal triumph. The Prime Minister predicted the country could make Brexit a “stunning success”, which he considered “not an end but a beginning“. At the end of the transition period, a last-minute post-Brexit deal to outline the future relationship between the EU and the UK was signed on 30 December 2020. This was applied provisionally from 1 January 2021 and entered into force on 1 May 2021.
However, in October, far from economic gain, the Office for Budget Responsibility (OBR) predicted that Brexit’s long-term hit to the British economy would be double that of the Covid pandemic, causing a huge “4 per cent reduction in long-run potential productivity.” The OBR also expected a large hit to trade, as total UK imports and exports will “eventually be 15 per cent lower than had we stayed in the EU.”
So far, not impressed
Perhaps not surprisingly, a recent YouGov poll found that 64 per cent of voters think the government is managing Brexit badly.
So what did the Trade and Cooperation (TCA) deal, which replaced our EU membership, amount to? As explained by the Institute for Government, it covered much wider areas of policy than just trade, being made up of three pillars:
- A free trade agreement covering the economic and social partnership, including transport, energy and mobility.
- A framework for cooperation between law enforcement and judicial authorities across civil and criminal matters.
- An overarching governance arrangement, which will allow for cross-retaliation across different economic areas.
There were also a number of joint declarations, including on co-operation for financial services, and participation in EU programmes.
What about standards?
The agreement offers virtually nothing on services, recognition of standards, or freedom of movement for young people and skilled workers. Neither does it include an agreement on agri-food products, which are normally subject to checks at the EU border.
The continued threats by Johnson’s chief Brexit negotiator Lord Frost to renege on the Northern Ireland Protocol (also part of the TCA accord) have effectively stalled the implementation of many of the potentially beneficial aspects of the TCA deal. Some examples are given below.
For most businesses, the promise of tariff- and quota-free access to the EU’s single market for goods, claimed as a “win” by Brexiteers, has proved to be an illusion, as non-tariff barriers remain. These depend on meeting complex rules of origin on the amount of local content required. Some industries, especially food, are simply unable to do this.
Goods: All businesses have to examine their supply chains to check that they meet percentage thresholds for content. For example, cars must contain no more than 45% of materials coming from outside the UK or EU. After a transition period ends in 2026, electric cars will not qualify for tariff-free trade if their batteries were imported from outside the UK/EU.
Huge hit to the City
Financial services: These make up around 7% of the UK economy. Brexit has been described by the Financial Times as a “slow bleed” and a “huge hit to the competitiveness and global relevance of the City.” More than 440 institutions have moved part of their business or set up hubs within the eurozone, shifting assets equivalent to 10% of the UK banking system, as the EU refrains from granting “equivalence” or market access decisions to key segments of the UK sector, to reduce what Commissioner Mairead McGuinness called “this risky over-reliance on a third country.”
Science and Research: Under the TCA, the government was set to fund full UK association with the EU’s 100bn Horizon research programme, at a cost of £6.9bn over four years. This has been held up by political friction over the Northern Ireland Protocol. Even arch eurosceptic Bill Cash complained: “British research institutions remain frozen out of key projects and funding despite agreement on participation.”
Data Protection: The UK government has signalled its own approach to data protection, which will focus more on the economic and social opportunities from the harnessing of data, rather than the associated privacy risks. A Financial Times leading article warned that this could remove vital safeguards, such as human checks on decisions made by computer algorithms.
Security and Policing: The UK will continue to be able to consult the European Criminal Records database, but will not have access to the Schengen Information System on which police forces circulate alerts on movements of criminals. As a third country, the UK can no longer participate in the European Arrest Warrant. London has negotiated a substitute arrangement, but a drop in the number of people extradited would signal a problem.
Brexit is never-ending
What Brexit really means for the UK is a series of interminable disputes on practically all fronts with its largest trading partner, which has an economy nearly six times larger. Whatever the Brexiteers want to claim about being “sovereign equals”, the EU is a supra-national body with much greater power and weight in the world economy and the UK stands to lose far more in any disagreement, both materially and in terms of its global reputation.
Britain, alone, risks becoming an irrelevance on the world stage.
Brexit has compounded the economic impact of the pandemic at home and, as has been made clear by the new German coalition and is an unwelcome distraction for EU leaders from major global challenges, such as the threat of dangerous climate change and escalating tensions with both China and Russia.
The Brexiteers’ fantasies about “global Britain” are finally coming home to roost. Under this administration, Britain will never be global and Brexit will never be done. We are condemned to never-ending acrimonious negotiations with those who should be our closest friends and allies.
