Brexit Impact Tracker – 18 August 2024 – Five Years to Save the West

In her recent book, Liz Truss considered that we have ‘ten years to save the West.’ For once, I think, she is not far off the mark. Although, I would argue we only have five years, and I would disagree with her on what ‘the West’ needs saving from. From ‘Globalism, Socialism, and the Liberal Establishment’ according to her – from far-right political figures like herself who incite the kind of racial hatred we have seen on the streets of UK citizens and towns last week according to me.

Given the increasing geopolitical tensions and the rise of illiberal political movements in the West, the next five years may very well turn out to be a watershed in Western history. It turns out the UK may – ironically to some extent in line with Brexiter boasts – actually play a pretty crucial role.

It has been just over a month since the new Labour government led by Prime Minister Sir Keir Starmer took office. As a result, all of a sudden, the UK turned from a country at the forefront of the seemingly ineluctable global trend towards a rather extreme form of post-truth, right-wing, populist nationalism (or popular conservatism, illiberalism or whatever monicker one prefers) into one that may soon be a centrist bulwark against the global decline of liberal democracy.

At a time where far-right figures like Meloni, Orban, and Fico govern important European EU member states and others – like Austria and France – may very soon follow, the UK’s Labour government may become the last bastion of progressive policies in an increasingly right-wing world. The UK’s role in stemming the tide of illiberalism would be particularly important if the US tumbles once again into a Putin-friendly government in November and the German SPD – a traditional ally for UK Labour – loses power to the CDU/CSU under Friedrich Merz – who – like so many centre-right politicians before him most likely will shift the CDU further right to try and outflank the far-right on their right.

The Republican National Convention in the US two weeks ago gave us a taste of what the world could look like for Labour in 2025. Emblematically, Trump’s pick for vice president on the Republican ticket JD Vance – riffing off well-trodden far-right tropes – suggested that the UK was the first Islamist country with nuclear weapons. We have become somewhat immune to vitriolic hyperbole from far-right figures in recent decades, but last week’s racist and Islamophobic riots in the UK show just how quickly such hateful rhetoric can develop real world consequences. Tellingly, the riots – targeted primarily at Muslims and immigrants – were triggered by false information about the immigration status and origins of the attacker who killed three children and injured several others in a knife attack on a dance class. Equally reflective of the times we live in, billionaire right-wing agitator Elon Musk tried to further stoke hatred in the UK, directly attacking our Prime Minister on X.

The violence and destruction that the reporting on the Southport stabbing on gave rise to serves, as a stark early warning to the new government to take the undermining of our democracy over the past fourteen or so years seriously. Indeed, defeating comprehensively the far-right elements in British politics should be a main focus of the new government over the next five years.

Stemming the tide

I have repeatedly written about the decline of UK democracy under the recent Tory governments and warned – perhaps in somewhat alarmist terms for some readers’ taste – against the threat of illiberalism and fascism.

The transition after the Tories’ GE defeat was somewhat reassuring in that respect. Not only did the UK not see any contestation of the election results comparable to what happened in the US in 2020 after Trump’s defeat; but also did Rishi Sunak in his new role as leader of the opposition accept the defeat and carry on his new duties almost statesman-like. That may be a low bar but given all the vitriol and political violence we have seen in recent years in the UK and elsewhere, it is a reminder that all is not lost for UK democracy.

Of course, this should not make us forget the dark sides of the 2024 GE. Most importantly that 4m UK voters have given their vote to Farage’s far-right outfit who now sends five MPs to Westminster, including Farage himself.

Stemming the far-right tide should be Starmer’s key concern over the next five years – otherwise, in five years’ time, he may find himself in a similar position to France‘s Emanuel Macron who did not manage during his years in power to convince people that he was addressing their grievances – leading to an relentless increase in support for far-right Rassemblement National (RN). In 2022, 4m people voted for Rassemblement National in France. By 2024 that figure has increased to over 10m. A truly frightening development that the UK needs to avoid.

The next five years will most likely not be easy in terms of economic, social, and environmental challenges the government will have to tackle. The Labour government will soon be blamed for not addressing key issues that push people to vote for extreme right-wing parties. The right-wing press, GB News, Reform UK, and the Tories will do everything to turn people against the government (as GB News already started doing in the most disgusting imaginable fashion last week, suggesting that far-right thugs rioting and looting small shops was somehow the fault of the ‘left elite’). From experience, blaming everything that is not going well in the country on the Labour government will probably work quite well.

Some in progressive circles seem to place their hope for the 2029 GE primarily on the fact that right-wing voters are overwhelmingly older people and that demographic trends will therefore play in favour of Labour and other liberal democratic forces. Here too, France provides a cautionary tale: 33% of 18–24-year-olds now support the far-right RN and its 28-year-old poster boy Jordan Bardella. There are worrying signs that in the UK, too, a fraction of young people is drifting into the darkest corners of politics notably due to the influence of social media. Reform is already more popular amongst the 18-24 year olds than the Tories.

The reshuffling of the right

Labour’s best hope for the next GE is that the turmoil in the Tory party and the rise of Reform mean that the party landscape on the right remains fragmented, splitting the right-wing vote. This is currently a fairly likely scenario. The conservative leadership contest – which will continue until November – most likely will end in the most far-right candidate being selected by the (far-right) Tory membership. That means that Tom Tugendhat – by current day standards a moderate centrist conservative – will most likely lose out to either Robert Jenrick or Kemi Badenoch and the Tory party therefore shifts further to the right.

An oppositional Tory party led by a far-right figure will in turn mean that there will be fierce competition between Tories and Reform for the 4m people who lent Reform their vote. In that scenario, the Tories would constitute a threat not so much for Labour, but for Reform. Such far-right infighting would drastically increase Labour’s chances of securing a second term in 2029 simply because the right vote will be split.

There is of course the possibility of the Tories inviting Farage – and much of Reform – back into the fold. That would create a formidable far-right party in the UK, but such a merger is far from certain, especially given the egos involved. Moreover, it is far from clear that even a united far-right – as opposed to right-wing – party would garner enough votes to win a general election. While the Tories and Reform together received approximately 38% of votes and thus more than Labour’s 34%, the conservatives adopting a far-right course would most likely lead to more centrist voters turning their backs on the conservatives.

The tribulations on the right of the UK’s political spectrum may provide Labour with further breathing space to pursue their own policy programme without having to look over their shoulder too much for some time.  

Relying just on that effect would of course be a risky and indeed foolish strategy. But it may help providing Labour with the leeway to adopt policies that finally give people the feeling that things may actually get better again.

From symbolic to substantive policies

A key recurring theme of my Brexit Impact Tracker over the past four years, has been the dominance of symbolism over substance when it comes to post-Brexit policy making. Many of the government policies adopted by Brexiter governments since 2016 were aimed at proving the point that Brexit is working and/or that Remainers have been wrong all along, rather than addressing any real world issues the country is facing. A good illustration is provided by trade policy, where successive Trade Secretaries have sought to conclude free trade agreements at quite literally any cost to the country so as to be able to claim at least one ‘Brexit benefit.’ Another one is the cruel, absurd, and incredibly wasteful Rwanda plan.

We can expect the new government to still do some of this. Starmer’s red lines for the UK-EU relationships (no single market, no customs union, no freedom of movement) are in this category. They fulfil not substantive purpose – indeed go against the stated purpose of reducing Brexit’s impact on the UK economy – other than signalling to Brexiters that Labour will not ‘betray’ them. Yet, by and large, we can expect the new government to focus a great deal more effort on actually fixing the countries’ problems rather than seeking to score symbolic points in the name of self-interest and of an ideology. The question is whether Labour will be able to deliver on its substantive policy goals. Here the new Chancellor’s fiscally conservative approach provides some cause for concern.

Some of Labour’s policies are bold and even fairly radical, belying to some extent Starmer’s centrist discourse and image. Most importantly perhaps the increase in public sector salaries to resolve the strikes over public sector pay and the willingness not to shy away from renationalising railways. In other respects, however, Labour – and in particular the new Chancellor Rachel Reeves – seem to swallow the current economic doxa hook, line, and sinker. Most importantly, Reeves first interviews and speeches can hardly be seen as anything else than a reaffirmation of the ideology of ‘sound’ public finances and austerity. This is largely self-imposed, however, by the incomprehensible decision to stick to the current ‘fiscal rules’ in spite of the fact that experts have been pointing out the nefarious effect of these misconceived rules.

There can be no doubt that by conventional standards the financial situation is dire, although there have been fiery exchanges with former Chancellor Jeremy Hunt  over Reeves’ announcement in the House of Commons of the discovery of a ‘black hole’ of £22bn in the public purse due to Tories’ unfunded spending commitments and tax cuts. Whatever the reality of that ‘black hole’ and whether or not Labour should have known about it before the GE, it led Reeves to announce the suspension of several infrastructure projects. Whether or not the Arundel by-pass is an essential piece of UK infrastructure that would contribute to economic growth Labour so badly wants is one question. But importantly it shows that Reeves completely adheres to the ‘sound’ public finance ideology, which is arguably at the heart of many of the economic ills the country is facing.

At the same time, the Chancellor is reportedly considering Public Finance Initiatives (PFIs) type ways to finance others. The first generation of PFIs introduced in the early 1990s were discontinued in 2018, because they were considered poor value for money compared to the state directly paying for infrastructure. Reeves’s use of 1990s rhetoric about ‘crowding in public investment’ indicates that she thinks more of the same will do the trick.

To be sure, her worry about what the financial markets ‘think’ is justified given recent experience in the form of the Truss-Kwarteng mini-budget. But there is little evidence that government borrowing form investment in infrastructure and growth worries capital markets. Mid- to long-term what we need is a more fundamental rethink of last centuries’ macro-economic and monetary theories that have been guiding our policy makers for too long. The planned establishment of a National Wealth Fund may be such a more fundamental change, but again due to the fiscal rules and the limits they put on government borrowing, at £3.5bn per year this fund may just be a drop in the sea.

A glance over the Atlantic could be instructive here. Joe Biden’s economic policies – aka “Bidenomics.” Bidenomics constitutes a paradigm shifting in economic policy making, by reviving Industrial Policy in the US. Over the past four years, for the first time in half a century inequality has declined for the first time in 50 years. Of course, the US is in a privileged position compared to the UK when it comes to public spending, but the basic lessons from four years of Bidenomics is that there is an alternative – and one that works better than the current doxa.

There is of course also another lesson from Bidenomics, which is that it is not enough to improve the countries’ economic situation for people to vote for you. Indeed, given Biden’s record on the economy, it is surprising to see how little credit the Democrats are getting for it. In a situation where large swaths of the electorate get their news from Fox News and far-right billionaire-owned social media, it is difficult for progressive politicians to get their message across. That’s no different in the UK and may become a problem for Labour over the next five years. Beyond getting the substance of the policies right, making sure that the message is being heard loud and clear and not distorted by far-right outlets should therefore be a priority for the new government.

Taking back media control

Establishing control of the public discourse via control over media companies is the very first thing illiberal governments tend to do (see here). This was no different in Britain, where recent Tory governments have successfully staffed the most important positions at the BBC with Tory supporters, undermining one of the key bastions of quality journalism.

In addition, the already  extensive control of the print media by right-wing owners and the increasingly problematic use of so-called SLAPP suit to silence journalists like Caroll Cadwalladr means that the UK’s free media are in serious danger. Labour should use its five years in power to make sure the UK media sector becomes more resilient in face of the continuing far-right challenge to liberal democracy.

Part of that strategy should be a reform of the way our media companies are owned and how standards for news are being enforced. Interesting models exist that would make media companies less attractive to far-right agitators and billionaires. Thus, academics have proposed models that would turn media companies from for-profit stock corporations into public purpose corporations whose purpose, by law, would not be to make money – one of the key reasons to propagate far-right ideas and politicians who lead to a lot of ‚clicks‘ – but to inform the population following the highest standards of journalistic diligence and truth-telling. The purpose corporation is a model of organisation that is slowly moving from academic fantasy, to actual possibility (most explicitly in the new French company law). Building on this trend and pushing for a special form of the purpose corporation for media companies would help address many of the issues the UK is facing.

The UK media landscape also needs to seriously address the patent inadequacies of the media regulator Ofcom in cracking down on the spread of fake news and lies via media channels that pose as serious news networks. A recent episode of the News Agents featured an interview with Melanie Dawes – the head of Ofcom – that illustrated to a shocking extent the self-imposed impotence of our media regulator when faced with fake news. Dawes explained that – despite many complaints and confirmed cases of spreading falsehoods – GB News had not been punished by the regulator, because Ofcom’s approach was – essentially – that anyone deserves a second chance. That argument is of course hard to swallow when the channel in question has been investigated and found at fault 12 times over the past three years and continues to spread false news.

Equally unconvincing was her argument that GB News – given its innovative news formats – is not really a news channel and should therefore be subject to different standards then actual news channels such as – say – the BBC. Again, it is hard to buy that argument given GB News’ self-proclaimed status as ‘Britain’s News Channel’ and that GB News audiences surely think it is a news channel.

Whatever the reasons for this lenience of the media regulator towards far-right media sources, cracking down on the spread of fake news is crucial to reign in the further erosion of UK’s body politique by the far right.

The reform of the media sector also needs to focus on social media – notably Twitter and TikTok – to counter the far right which – both literally and figuratively – currently owns these spaces that appeal to young people. Elon Musk’s disgraceful use of his social media platform to stoke hatred during the racist riots in the UK by making absurd claims about the inevitability of civil war in the UK illustrates this. Young voters in particular may be seduced by far-right figures and political parties who have a strong presence on social media channels that ‘Gen Z’ primarily use as source of information. A terrifying example is Farage’s support for Andrew Tate, which chimes with a group of young people for a shockingly large number of whom (31% according to one poll) Tate remains a role model. If Farage manages to use social media to turn a significant part of young voters into Reform supporters, the UK will face a similar situation in 2029 to the one France is facing right now.

Of course, the resistance to overcome is formidable both in terms of the legacy media and of social media. This was illustrated by the shocking allegations of a deal between Labour and Murdoch that allegedly consisted of Labour promising to drop the Leveson inquiry in exchange for Murdoch newspapers’ backing Starmer ahead of the General Election. Now that the election has been won, the UK government should have a genuine long-term interest in removing one of the most constraining forces on the democratically elected government’s leeway to address the country’s problems – including Brexit.

Brexit under Labour

During the election campaign, Starmer’s very timid approach to the Brexit question was a constant source of puzzlement and indeed annoyance for many anti-Brexit Labour supporters. The promise of a closer, more friendly relationship with the EU without any far-reaching reversal of hard Brexit and a series of red lines, seems like a new form of ‘cakeism’ that has characterised the Brexit project from the beginning.  

Some had hoped that a large majority would embolden the new government to abandon that cautious approach to Brexit to quickly deliver on the economic growth promise. Yet, so far, it would seem that Starmer will continue down the path of caution. This was most strikingly and puzzlingly illustrated by him turning down a youth mobility scheme with Spain.

At the same time, while publicly holding his red lines, Starmer’s government has included a bill in its legislative programme – the Product Safety and Metrology Bill –   that paves the way for tracking EU regulations when it comes to safety standards and the like. This is expected to facilitate the promised agreement on sanitary and phytosanitary standards (SPS), which are responsible for much of the Brexit border red tape, and could constitute a step towards dynamic alignment with EU legislation. This, in turn, seems to be an all but inevitable step if the government is serious about removing much of the trade barriers imposed by hard Brexit.

The problem, of course, is that it is done in a stealthy way and therefore immediately leads to cries of ‘Brexit betrayal’ in the far-right press.

This seems to be the inevitable result of Starmer’s EU strategy: by reaffirming the red lines imposed by the Brexiter side, any attempt to remedy the damage Brexit continues to do to the country on a daily basis can only be undertaken underhand and in the hope of not being noticed by the public. That puts the PM in a situation where he almost has to apologise for trying to fix the Brexit mess.

A much more promising strategy – albeit in the short term more controversial one – would be to impose a new narrative on Brexit. A narrative that acknowledges that Brexit is a problem that needs fixing not an achievement that needs safeguarding. Of course, that would be water onto the mills of the far-right press and Brexiter discourse of scheming and lying elites. However, if remedying Brexit damage helps with improving the economy and people’s living standards and given that all polls since 2016 show waning support for Brexit, Brexiter whining will hardly matter anymore in five years’ time.

Conversely, as the Private Eye has pointed out in its characteristically pointed way, Reeves’ alarmist outcry about the alleged £22bn hole in the public purse is hard to take seriously when at the same time the government does not seem to feel any urgency to fix the £40bn price tag some estimates attach to Brexit.

More generally, it would be incomprehensible for a government that desperately wants economic growth to forgo one of the surest ways of boosting GDP and investment by simply reclaiming some or all of the growth lost to Brexit, which conservative estimates place at around 2-3% of GDP.

That is not a call for starting a process to rejoin the EU. That would be pre-mature. As Chris Grey argued convincingly a couple of weeks ago week, the incentives for the EU to engaging in such a process right now are minimal. There would of course be some political capital to be gained for the EU by showing to other countries that exiting the EU may not be such a good idea. But that lesson has probably already been learned by most Eurosceptic parties. So, the drawbacks for the EU of engaging with the UK on rejoining probably outweigh the incentives to do so. Most importantly, Brexiters – while deprived of direct governmental power – are already promising to sabotage any attempts to undo Brexit, which for the EU creates uncertainty about what might happen after the next GE.

So, the first step to a more productive and ultimately closer relationship with the EU needs to be to comprehensively defeat Brexitism and Brexiters in order to create certainty about the UK’s intentions. Making Brexitism once again the ideology of far-right ‘fruitcakes, loonies, and closet racists’ rather than a respectable policy programme is a pre-condition for a permanently improved relationship with the EU. Here the race riots may present a silver lining.

The dropping of the mask and a brighter future

The incredibly sad and tragic stabbing of children in Southport and the appalling far-right racist riots that followed – as awful as they are, have one political benefit: They have unmasked the far-right. The closet racists are out of the closet. And Farage and other far-right figures find it hard to disown the violence which is so clearly inspired by their hate-mongering. When the rioting racists in the streets of UK towns and cities chant the same slogan Prime Minister Sunak had on his lectern a few weeks ago, it is hard to claim you have nothing to do with it. When racists rioters chant your name alongside that of Tommy Robinson; and when the targets of their hatred are the same as the ones you have been stocking hatred against for years – including hotels housing refugees and offices of what the conservatives have called ‘lefty lawyers’ – few people will find it plausible that it is not your fault. As a result, despite Farage’s remonstrations against the moniker ‘Farage riots,’ the British people see the link, and it has affected Farage’s popularity among all but the most extreme voter groups.

This provides Labour with the opportunity to drive home the point that far-right political rhetoric has real-world consequences and needs to be resolutely challenged and defeated, not accommodated. If Labour’s spin doctors are smart about the aftermath of the riots, this will open a space to turn the tide on far-right rhetoric like we have not seen it in this country at least since 2015.

If Labour grabs that opportunity, then perhaps in five years’ time Britain may become a model of liberal democratic resilience that other Western countries envy. Not because Brexit worked, but because the damage it did to the country forces those who oppose it to be serious about proposing an alternative. That would be a wonderful Brexit benefit.

 

 

Note: When I started this blog, my motivation was to keep track of what the right-wing populist project does to the country, its economy, and its society. With the electoral defeat of the Tory party, we are now entering a new phase of Brexit. It can be expected that Brexit-related issues – while remaining controversial – will be treated more as issues subject to the ‘quiet politics’ of substantive and technical negotiations rather than as the basis for ‘noisy’ electoral politics. Now that Brexit is likely to move into a more technical direction, I am not sure I am the best person to comment on these issues. Partly that is due to workload and family commitments, which prevent me from spending enough time reading up on all the technical developments and have already led to my posts becoming less frequent. But beyond that there are other sources – such as the excellent UK in a Changing Europe centre, the Centre for European Reform, Chris Grey’s Brexit & Beyond blog, and Paul Adamson’s Encompass Europe – where experts analyse the technical details of the UK-EU relationship in a much more expert way than I ever could. Therefore, I have decided to make the Brexit Impact Tracker an occasional blog for the time being. I will comment on events and developments that speak to my expertise in the area of the political economy of populism rather than trying – in vain – to keep up on a weekly or fortnightly basis with all the technical developments. I do hope regular readers of this blog will continue following it even though posts will now ‘officially’ be less frequent.

Brexit Impact Tracker – 1 July 2024 – The Toxic Waste Election: Brexit Poison & Fixing the Supply Side of British Politics

We are into the final week of the 2024 UK General Election (GE) campaign. Reform Party leader Nigel Farage wants it to be the ‘immigration election.’ It may be better characterised as the ‘toxic waste’ election. Like a barrel of toxic waste, Brexit slumbers under the surface, but continues to poison British politics even when it is not talked about. Indeed, one of the defining features of the 2024 GE campaign, that many people before me have commented on, is how little Brexit features in it. This is particularly striking if we think back to the 2019 election which was the ‘get-Brexit-done election.’ Now, Brexit hardly gets a mention – with the notable exception of the Scottish National Party (SNP) whose manifesto contains promise for an independent Scottland to rejoin the EU.

The conservatives have of course very good reasons for not wanting to talk about the real-world effects of Brexit that more and more voters are aware of and unhappy with. Labour too have very good reasons to stay clear of the topic as Chris Grey convincingly argued early on in the campaign. The LibDem manifesto does contain the pledge to rejoin the single market as does Plaid’s; and the Greens promise to rejoin the Customs Union and reintroduce free movement of people. Even Reform UK’s ‘contract with the people’ contains – according to Chris Grey’s most useful analysis of all manifestos – relatively little about Brexit. And what it does contain could be described as ‘Brexit, take 2’ – i.e. a series of promises of doing Brexit right by doing what others had promised before but realised was not feasible or desirable. Regardless, smaller parties’ Brexit commitments do not make any significant dent into the Brexit Omerta that the main parties manage to maintain.

Yet, like in so many other cases, here too Brexit is a symptom rather than the cause of the state of British politics. The Brexit Omerta simply reflects a more widespread inability of British politicians to be honest with the British electorate. Dishonesty may seem like a rational choice for politicians on the campaign trail. Dishonesty has led to seemingly unprecedented levels of apathy and cynicism amongst the British electorate – partly at least because – as a ‘More in Common’ focus group participant stated ‘trust has been shafted.’ For the optimist, record low levels of trust in politicians may not be as corrosive for democracy as many of us may think (because if you don’t trust politicians, you may be less likely to want to hand power to an autocrat?).  But dishonesty and lack of trust will certainly make it more difficult for the next government to take the difficult measures it will necessarily have to take to start changing course on a vast range of policies that have pushed the country close to breaking point.

Dishonesty rules

Brexit may be the most obvious example of politicians not telling us the truth, but it is by far not the only one. Starmer cannot tell us why he supported Jeremy Corbyn back in 2019. Ed Davey cannot be open about whether or not the austerity policy his party supported during the Coalition government was a mistake. And Sunak cannot concede that the last 14 years of Tory government have made people’s lives worse in many respects. Even Farage – the man whose main electoral appeal is to speak his mind – holds back with his opinion when he does not dare telling us exactly why he thinks Sunak does not understand our culture.

The feeling that nothing in this country is working seems widespread. Even those who tell us we should not talk down our country, state – often in the same sentence – that ‘the country is dead.’ Yet, the two only realistic contenders for the position of PM run their respective campaigns on the claim that ‘our plan is working’ and ‘stability is change.’ So, we are made to believe that continuing down the path we have been on these past decades will somehow produce better outcomes under the next government.

So why can British politicians not tell us what they really think about the state of the country and the extent of changes that are needed?

Mediated dishonesty

One key reason for the rampant dishonesty is the UK’s media landscape and the question who owns our media.

The red-top newspapers and broadsheets like the Telegraph have long played a key role in keeping politicians in this country on the straight and narrow; never letting them stray far off a fairly right-leaning form of conservatism as the outer boundary of what is possible in terms of progressive reforms. The Daily Mail’s ‘Red Ed’ campaign is an extreme – but by no means unique – example of how putting forward policy ideas that the editors of right-wing newspapers and their owners do not like will be ruthlessly and often successfully punished. Playing to people’s fear of socialism – which itself is a product of the cold war – by reducing all progressive policies to the totalitarian regime of the USSR is a particularly successful strategy.

The fear of falling foul of what Rupert Murdoch finds acceptable policy choices constrains the policy space for progressive forces and explains why Labour often takes very timid positions in election campaigns. And when they do not, they will be punished by the media and – as a result – the electorate, as Corbyn experienced in December 2019, delivering Labour’s worst general election result since 1937.

Arguably, the restriction of what is ‘sayable’ in British politics, affects not just journalists working for right-wing editors and owners. A recent study has found evidence for a right-wing bias in the BBC’s high profile ‘Question Time’ programme, with right wing politicians being given more airtime than others. Given the harsh criticism from right-wing populists – not just in the UK, but in many countries with anti-state right-wing parties (something I have done research on with my POPBACK colleagues) – that public broadcasters are exposed to, these choices may be the result of journalistic (unconscious?) coping strategies to avoid claims bout ‘left-wing bias’ from powerful right-wing figures.

The right-wing print press may be losing influence, as people increasingly turn to online and social media for their news, but their online versions and new billionaire-owned right-wing new outlets – like Paul Marshall’s GB News – complement them to keep the right-wing ring-fence around what is ‘sayable’ in British politics intact.

GB News’ future expansion or otherwise over the coming years may be a key factor determining the domain of the politically feasible for the next government. One participant in a focus group explained that the reason why she thinks everyone should watch GB News is, because people just talk, there is no right or wrong, and ‘it’s just opinions’ (as opposed to reasoned arguments based on facts?). The growing influence of GB News on UK public opinion may be the single most serious threat to UK democracy in the coming years. If Brexit is a leaking barrel of toxic waste lingering at the bottom of the political ocean, GB News may become the political equivalent of a core meltdown in a nuclear power plant.

Strategic and relative dishonesty

The influence of right-wing media outlets – or rather their editors and owners – over British politics has constrained the field of what is sayable and feasible so much that there is indeed little daylight between what Starmer says about Brexit and immigration and what Sunak – and indeed Farage – say. That does not mean that ‘they are all the same’ and that it does not matter who we vote for. Rather, it means that there may be a considerable discrepancy between what politicians say before the election and what they do afterwards. I have written before about my concerns with such a tactic of strategic dishonesty, which obviously may lead to a sense of betrayal opening up any progressive government to an additional line of attack from the right-wing media.

Of course, despite complaining about politicians dishonesty, people do not really seem to care much about truth in politics. Thus, while Reform supporters tend to explain their support for Farage by referring to his alleged honesty (‘He says it like it is!’),  it seems to me that often what they really mean is that he speaks his mind rather than that he is telling the truth. The fact that he has lied repeatedly – e.g. about Brexit – is well-established and easy to prove. Reform supporters know that, but the point is that they do not care about honesty. So, what people like about Farage is not that he tells the truth, but that he tells his truth regardless of the outrage, hurt, and harm he causes. In other words, it is the fact that he claims a right to transgression not that he is honest – in the sense of telling the truth – that makes him attractive to voters.

Yet, interestingly, while far-right voters forgive their transgressive role models any lie, there sense of honesty is relative. When it comes to actors further to the centre or left of the political spectrum, they are accused of and harshly judged for any perceived lack of honesty. Claims of betrayal – by judges, the ‘Remainer parliament,’ and now even the conservatives – have been well rehearsed in relation to Brexit. Starmer’s silence – or at least extreme vagueness – about how exactly he wants to ‘make Brexit work’ while maintaining his red lines and now manifesto commitments (no rejoining, no single market, no customs union, no freedom of movement) considerably constrains his room for manoeuvre if he wants to avoid inevitable criticism for betraying the people if he becomes the next PM.

While Starmer’s ultra-cautious strategy may be understandable given the recent Corbyn electoral disaster and the force of right-wing voices in the country, it has an important implication, namely that it prevents Labour from changing what is on offer in British electoral politics.

Fixing the supply side

Perhaps observers are right to say that we do not need to talk about Brexit in this election. After all, it is a hugely divisive issue that has not led to any constructive and problem-solving orientated policymaking, but anger, hatred, and irrational policies. So, ignoring the issue for now perhaps has some positives. But ultimately it is delaying the inevitable and leads us into another five years where a government’s destiny is tied to the toxic waste left behind by that fatal referendum result from a decade ago.

The government who seeks to remove the barrel of toxic waste from British politics, would have to be able to change the narrative on ‘the people’s will’ by making a credible case that ‘the people’ have changed their minds. Perhaps that can happen after the election, but of course the accusation that the next government does not have a mandate to ‘fix Brexit’ – rather than making it work – will loom large, thus constraining the political leeway.

Therefore, like in other areas, centrist parties urgently need to stop buying into the narratives imposed by the far right and instead start imposing their own. Trying to beat the far-right on its own terms has proven a disastrous strategy – not just in Britain but also elsewhere. Chris Grey writes about the Tories’ approach to migration: “repeatedly making undeliverable promises about immigration to head off the Farage challenge” has led to “the invariable result of feeding that challenge when the promises are not kept.” The GE campaign has shown that Labour seems to be committing the same mistake with the Tories. Rather than challenging the terms of the debate imposed by the Tories, Starmer’s Labour is seeking to outdo the Tories on their policy goals. This is true for immigration, Brexit, taxation, and economic policy more broadly.

The reason why progressive forces are reluctant to tackle Tory policies head on is – besides the constraints imposed by the right-wing media – the mistaken belief that they somehow reflect what people want, i.e. that there is demand for the sort of policies the Tories propose. The most egregious example of policies that Tories offer but people do not want is the strategic underfunding of the NHS and its stealth privatisation, the pollution of our sea and rivers, and increasingly Brexit.

More broadly, the assumption that far right figures like Farage or Lee Anderson simply say what ordinary people think is the most dangerous idea that prevents centrist and progressive forces from confidently challenging far-right ideas head on. It is not only a dangerous idea, but it is also false. In fact: People don’t think, they feel!

I know, coming from an academic, that may sound arrogant, but I include myself in this: My reaction to events is primarily emotional. I am shocked, get angry, or sad, less often these days, happy – then I calm down, read up, consider alternative views, and open my mouth once I feel confident, I have done my intellectual ‘due diligence,’ kept my emotions and prejudices in check, and allowed for the possibility that I may be wrong. I do not always have – or take – the time to go through this process. Sometimes I react emotionally – sometimes – to save time or effort – I rely on other people’s arguments rather than my own. Far right Reform and Tory voters are no different.

A recent New Agents report from Leigh – near Manchester – illustrates that. John from Leigh did not come up with the idea that – to paraphrase – everywhere Muslims go, the country ends up adopting Sharia law. He heard or read it somewhere. Karen’s argument that immigrants are responsible for low wages is not based on her own reflections, but something she has picked up from someone else. These are ideas they were fed by someone else and made their own because they provide them with a way of understanding and coping with their own situation. They chime with their feelings of frustration and anger over their living standards because it provides a reason, an explanation, and a scape goat – and thus also hope for an easy solution (i.e. “zero net migration”).

But John and Karen equally well could adopt the idea that it is because of the increasing pressures on companies to pay dividends to shareholders that wages are low, not because of an oversupply of low-skilled workers. Or that Muslims do not replace our culture, but rather enrich it by adding new ideas, points of views, ways of doing things as migration has done for millennia.

In other words, what needs fixing is not the demand side of politics – i.e. what John and Karen ask for – but the supply side, i.e. what sort of ideas and explanations are being heard by voters. The centrist and progressive forces’ role here is to provide narratives and explanations that are much closer to actually capturing what is wrong with our country than the facile scapegoating the far right relies on.

Of course, you cannot make people stop thinking in us v. them terms, but you can redefine who ‘us’ is. If the far right win the battle over the us, it will be defined as white British born individuals. If more progressive forces prevail, ‘us’ may come to mean anyone living in our country and contributing to its prosperity regardless of skin colour, gender, and religion.

Focussing on fixing the supply side of democracy is based on the acknowledgement that it is not people who make democracy dangerous - its political entrepreneurs like Farage, Braverman, Rees-Mogg, and Truss. Consequently, the solution cannot be to imitate those who claim that their horrific ideas speak for the people. The solution is to provide people with an alternative voice.

Ignoring that basic fact about democracy is the greatest sin of our governing elite who has let us down for decades. The 2016 referendum best illustration of the incredible inaptness of our political elite. People did not want Brexit, Farage and UKIP did. What people wanted is to feel empowered to finally do something about their situation. To do something that gives them hope. Voting to exit the EU was the only thing on offer. A less incompetent Prime Minister may have come up with a more creative offer for people to choose from – perhaps even one that would have started addressing some of the very real issues people are facing.

In other words, the problem in British politics is not Farage – the problem is Cameron. It is the role of political leaders – and first and foremost the PM – to make sure demagogues like Farage cannot damage democracies. That does not mean ignoring what ‘the people’ want, but it means doing more than trying to fend off unhinged challengers by coopting – and thus feeding – their ideas just because they happen to be capturing part of the electorate. It means offering alternative narratives, not engaging with the unhinged challengers on their own terms, but setting the record straight. If Brexit has taught us anything, it is that even if you give them what they want, they will not stop challenging you. They will use their battle-proven weapons to fight you in the next battle – Rwanda, EHRC, Ukraine etc. Engaging with them on their own terms legitimises their position and encourages them to become more radical still, leading thus to a downward spiral of extremism. So, what we need is politicians who dare tell people that immigration is not what makes them poorer. It’s politicians that dare tell people that taxes may have to rise to put public services back on their feet and to fund the urgent transition to a net zero economy. With the right narrative Karen and John can be convinced that ‘net zero’ not ‘zero net’ is what our country and the world need to have a prosperous future.

The stakes for Tursday’s GE could not be higher – especially now that France is about to fall into the hands of the far-right and the new European Parliament may very well for the first time have a pretty much explicitly pro-Russia faction. But it is not a time for despair. Whatever happens on Thursday, those who defend liberalism, progressivism, and democracy against reactionary illiberal forces will either have some breathing space or a strong sense of urgency to start working on positive alternative narratives to fix what is on offer in British politics.

Brexit Impact Tracker – 12 May 2024 – How Labour should get ready to inherit the Brexit mess

May has been an eventful month in Brexit terms so far. On May 1st, the next batch of border checks on imports of certain goods have come into effect and there were local and Mayoral elections taking place up and down the country, which were widely considered a big test for PM Sunak.

Beyond the complexities, what both events illustrate is that Brexit has become unambiguously a (far-right) minority project. From ports, over businesses, to a majority of voters, very few people outside the narrow elite of politicians whose reputation and career prospects are entangled with Brexit still believe that anything good has or will come out of the project.

The best evidence to support that claim is the fact that hard-core Brexiters David Frost and Robert Jenrick felt the need to pen an article that reads like a truly desperate plea for other hardcore Brexiters to not lose hope that something can be salvaged from a project that in its envisaged form was bound to fail.

Yet even those who seemingly have lost hope do not ‘face up to Brexit’ – as Chris Grey put it recently. Instead of taking seriously the very real problems that the exit from the European Union and the single market create for an ever-growing list of people and businesses, those in charge continue to treat Brexit with nonchalance, denying its very real impact on the British economy and businesses, and instead trying to divert attention.

Diversion strategies

Their preferred diversion strategy remains immigration. Over the past weeks the government was trying to shift public’s attention towards appallingly trivial things such as the fact that one illegal immigrant has accepted £3000 from the UK government to voluntarily depart the country for Rwanda. The right-wing press and the government seek to create the impression that this somehow is linked to the recently passed -and absurdly named – Safety of Rwanda bill (which it is not, given that the voluntary scheme is separate from the forced deportation scheme).

The right-wing narrative was helped, however, by the Irish government. A spat has broken out about an uptick in asylum seekers in Ireland purportedly coming from NI as a result of the Rwanda plan. Others have commented on the complexities of the issue (see here and here). Suffice it to say, anyone seriously interested in the question whether or not the alleged increase of asylum seekers in Ireland coming by land (and hence from the UK) was driven by the Rwanda plan, could only conclude that it is impossible to know at this stage. Even if there was an increase in asylum seekers who already are in the UK moving to Ireland and if this was caused by the Rwanda plan, it would still not allow any conclusions to be drawn for the effect of the same policy on asylum seekers who are not currently in the UK. The fact that such bold and questionable statements have to be made (e.g. here by Tory minister Michelle Donelan) illustrates how very thin the evidence is for Brexiters having delivered any of their promises.

It also illustrates another persistent key feature of Brexiters’ delivering their project: Namely that they are fundamentally indifference to the actual impact their project is having on the country – otherwise all the political effort and the obscene amounts of public funds spent on a policy largely considered not only illegal but irrelevant in terms of actual migration numbers cannot be explained. Brexit, as I noted so many times before, is merely an instrument to fool enough people in a bid to conquer and maintain power – not a project that requires careful planification and execution to achieve positive outcomes for the country. Yet, even in that respect, Brexit starts to fail.

Brexit’s declining effectiveness

The instrumental effectiveness of Brexit in achieving the goal of conquering and maintaining power is rapidly declining as fewer and fewer people are being fooled and even fewer are seeing any Brexit benefits. The local election results – to the extent that they are a judgment of Sunak’s Brexitist government – illustrate that to perfection. The media have been awash with commentary of what the local elections really mean in terms of the next General Election. Now that all votes have been counted, three interesting observations seem to emerge:

Firstly, with a loss of nearly half of the seats to be defended (losing 474 and retaining 515), the Tories’ losses were at the lower end of expectations even accounting for pre-election expectation management. Even the hope of holding on to the Westminster seat in Blackpool South – where the Tory MP was defending a large majority – and two high-profile Mayoralties (the one in the West Midlands and the one in Tees Valley) was dashed. In the Blackpool South by election, Labour managed a 26.3% swing away from the Tory candidate. In the Mayoral races, Ben Houchen was re-elected as Tory Mayor of Tees Valley, but clearly despite his being a Conservative not thanks to it (very symbolically he reportedly forgot to wear his blue rosette for to the count). Andy Street widely-respected West Midlands Mayor, on the other hand, very narrowly lost his re-election bid, with some commentators suggesting he may have won had he run as an true independent rather than a pseudo-independent who played down his links to Sunak’s Conservatives without formally cutting them. More significantly – because not subject to the ‘incumbent bonus’ – the inaugural elections for the mayors of York & North Yorkshire, the North East, and the East Midlands all returned Labour mayors – despite conservative mayoral candidates mostly imitating Street and Houchen’s pseudo-independent strategy. The victory in York and North Yorkshire was hailed by Rachel Reeves as particular sweet win for Labour and particularly significant, because it indicates that older rural voters too are turning away from Sunak’s Tories.

The extent of the defeat and lack of confidence of the Tories was illustrated in a rather amusing way by deputy foreign minister Andrew Mitchell who insisted during the recount of the West Midlands vote that whether Andy Street won or ‘nearly won’ – i.e. what most people would call ‘lose’ as Channel 4 presenter Cathy Newman pointed out – it would be a great achievement for the Tories.

In short, then, in different parts of the country, being part of the Conservative party has become an electoral liability not an asset.

Unsurprisingly, the reaction of the PopCons  in the Tory party to the local election was to pressure Sunak to move the party further to the right. This seems to be based on the – correct – observation that where far-right Reform UK stood candidates, they took a large chunk of votes away from the Tories. What that right-shift strategy ignores though is that even the combined Tory and Reform vote (on average around 24% and 12%) only amounts to a minority of the electorate and even in the most optimistic scenarios would not be enough to win the GE.

The second interesting observation that emerges from the local elections concerns Labour’s chance of winning the next GE. Some commentators and the Tory party stress that Labour has not done as well as some may have expected or as well as Labour did in the last local elections before the 1997 GE victory. That idea is primarily based on Sky expert Prof Michael Thrasher’s argument that his estimate of a 7% lead of Labour over the Conservatives in the local elections suggests a number of seats in a GE that is 32 short of a majority. There are several problems with Thrasher’s claim, most notably that it does not acknowledge that people vote differently in GE’s than in local ones, that Reform will field more candidates competing for Tory votes in a GE than in the local elections. It also ignores the fact that a UK GE will be decided not just in England but may be heavily influenced by what happens in Scottland where the recent turmoil the SNP has been facing may allow Labour to retake a number of seats.

Regardless the idea of Labour underperforming was picked up by senior Tories. Sunak was according to some convinced by Conservatives election strategist Isaac Levido to spin the results not so much as a Tory near-worst-case scenario, but as a Labour not-as-good-as-expected one. He used Thrasher’s 7%-margin argument as the straw to clutch at, suggesting that the most likely outcome of the next GE will be a hung parliament and hence to a – supposedly – unsavoury coalition or Labour, Greens, Lib Dems, and/or SNP. This refried ‘coalition of chaos’ strategy from the 2015 GE is meant to encourage voters to flock back to the Conservatives, but may of course equally well push some former Conservative voters to switch to Labour rather than – say – the LibDems to avoid a hung parliament. Possibly for that reason some leading conservatives seem to privilege a different strategy which more directly aims at bolstering the Conservative vote share by suggesting a vote for Reform is a vote for Labour. While Sunak’s strategy is geared towards the electoral centre ground, the latter strategy is more in line with the direction of travel the party has embarked on in terms of a drift towards the right fringes of the political spectrum.

Regardless, taking into account that there is little tactical voting in local elections, Labour’s performance probably exceeded expectation most importantly due to the massive swing in the Blackpool South byelection and the victory in the North Yorkshire and West Midlands Mayoral races. Given that Labour’s stance on Gaza clearly has hurt its appeal among Muslim voters – both in terms of losing votes to other parties and possibly to abstentions –, the results are even more remarkable.

A third key takeaway concerns what has happened beyond the two dominant parties. On the far-right Reform UK have done well – but not brilliantly. But again, that is not necessarily surprising given that Reform did not stand as many candidates as they will in a GE. Conversely, Lib Dems – while down in terms of vote share – won more seats than the Tories, suggesting that Sunak is losing voters not just to those who think he is too centrist, but also to voters who think he is taking the party too far right. The Green party too won many new seats, almost doubling their previous total. Overall, what the local elections tell us in this respect is that the country is varied and pluralistic with people voting for parties as diverse as the Greens and Reform UK.

What it also tells us is that the majority of people who could and did vote cast their vote for parties that do not engage in the Brexitist discourse of xenophobia and culture wars that the Tories and Reform offer. Despite all the efforts that Tyce, Truss, Braverman and their likes are making to render PopCon popular, the divisive US-style culture war politics are the views of a minority of people in this country. Brexitism has been and remains the project of a far-right elite, not a reflection of what most people want.

Scorched earth, traps, cans down the road

Given that, it seems all the more astonishing that the Labour leadership still caters to the minority that does support Brexitist parties to win the next GE, rather than to the majority of people in this country. To be sure, given the distribution of that minority across key constituencies Labour needs to win to overturn the Tory majority, a cautious approach is certainly warranted including on Brexit. But a new risk for Labour emerges from the fact that Brexit is such an unmitigated disaster that more and more people are disowning it and distancing themselves from it. Thus, Bill Cash in his role as Chair of the European Security Committee asked Transport Minister Guy Opperman a question about the impact of the new border checks on food supply, expressing his ‘worry’ about perishable goods getting stuck at the border – omitting the fact that problem is a direct consequence of the hard Brexit he advocated for. Similarly, talk about the border checks being a choice rather than a necessary consequence of leaving the SM (a framing repeated even by trade experts), suggests that Brexit per se is not to blame, but rather its implementation.

What this more aggressive disowning of Brexit by more and more Brexiters may presage is that come the GE, voters will believe that the logical, inevitable, and necessary consequences of Brexit are policy choices that could be different even within the parameters of hard Brexit. In other words, we may witness a return of naïve cakeism, whereby people believe that – if done right – we could both exit the EU and enjoy all the privileges that EU membership confers on member states while not carrying any of the costs.

If this narrative catches on – as it has in the past - it will be easy to blame the new government for the further fallout from the full implementation of Brexit – such as the next patch of border paper work scheduled to be introduced in Octobre 2024 and physical checks, which are expected to cause considerable delays at UK ports. For Brexiters, kicking the can down the road on border checks, may now turn from a necessity imposed by unpreparedness and incompetence (as illustrated by the May 1st introduction of new checks), into savvy politics. Delaying the checks would force an incoming Labour government to introduce these necessary checks under its watch, possibly causing considerable chaos at the UK borders, leading to food shortages and higher prices. Alternatively, a Labour government keen on avoiding this outcome, delaying the checks further will sooner or later lead to another food scandal as the seizure of illegally important rotten meat this month and the increase in cases of food poisoning since Brexit suggests. If such a food scandal happens after a GE that returns a Labour government, Brexiters will claim that it is not Brexit, but the way it is implemented (or not implemented if the choice is closer alignment with the EU) by the (Labour) government that caused the damage.

That strategy can clearly be inferred from Frost and Jenrick’s article, which seeks to claim that things are going well outside the EU (based primarily on wishful thinking and the usual spurious claim about fastest-growing economy in Europe and about meaningless things like a fourth place in service exports). Brexiters are preparing the ground to blame any future economic problems on the anticipated Labour strategy – however timid – to seek closer alignment with the EU.

The risk of that strategy working is increased by Sunak’s attempt to set up a series of traps and scorching the earth in various places for Labour to inherit a proper mess.

Getting ready to inherit the Brexit mess

What can Labour do to avoid that trap of getting the blame for the inherited Brexit mess? The first thing would be to change Labour’s discourse that consists in saying in the abstract that the ‘people’s’ vote for Brexit has to be respected and that Brexit can be made to work (I have argued elsewhere that I think it could – in some sense). People clearly have changed their mind since 2016 – so there is no betrayal associated with changing government policy on UK-EU relations. Instead, Labour should focus on pointing out just how damaging Brexit has been. People need to understand the real cost of Brexit to accept that rapprochement is not treason but vitally important to reduce the damage. Most people will not take much convincing.

There is of course a risk associated with this, which comes from two sides as Simon Nixon’s post argues: Despite a majority of people now regretting Brexit, the electorate is not evenly spread geographically and winning leave voters who do not regret their vote may still matters in some areas. More importantly perhaps, the right-wing press remains pro-Brexit and antagonising them is understandably a key worry for Starmer.

However, as the Tories keep falling in the polls and the Brexit disaster continues to spread, we are approaching a point where the risks of boldness may be dwarfed by the risk of pre-election caution that will be followed by Labour ending up holding the hot potato. Accepting that a cautious approach to Brexit is not risk-free would be an important step to formulate a more effective and pro-active strategy. Starting to point out all the different ways in which Brexit has damaged people and businesses up and down the country without delivering on literally any of its promises would lay the groundwork for Labour to then get credit for limiting its damage once in power. For instance, shifting the focus on the unmitigated disaster Brexit borders currently are, will be key to generate the support in the population for measures to address them – even when they involve policies of rapprochement with the EU, e.g. through dynamic alignment. Given that such measures seem inevitable if rejoining remains a red line, Labour ignoring, or even downplaying Brexit damage makes no sense.

This is even more the case as Labour may be underestimating the number of voters who seem to be willing to support a bolder stance on Brexit. Edwin Hayward pointed out on Twitter that 34% labour voters seem unaware that Labour are against rejoining the EU; presumably suggesting that they see the Conservatives as the Brexit party and Labour as the anti-Brexit party.  The possibility that Labour voters are expecting more pro-EU policies than what Labour currently offer and the fact that even outside Labour supporters Brexit is now clearly a minority elite project, suggest that is more leeway than the Labour leadership admits for a bolder strategy on UK-EU rapprochement. That does not seem where Labour is at at the moment.

Red lines over red lines

A few weeks ago, I suggested it was time to ‘invert the red lines’ – i.e. putting the onus on Brexiters by saying there is a limit to how much damage the country is willing to accept for the pipe dream of ‘taking back control.’ Yet since then, Labour has added more Brexiter-imposed red lines, even where they are clearly not needed for electoral gains.

Thus, Labour’s reaction to the EU’s proposal to start negotiations on a Youth Mobility Scheme (YMS), like the government’s, was to reject it.  Worse still, a spokesperson for the party stated that it saw such a deal as “synonymous with free movement.” Given that any government seeking a closer relationship most likely will have to discuss a YMS – because the EU seems keen on one and may include it in a future negotiation package – unhelpfully and wrongly equating such a scheme with FoM is puzzling. If the goal was to make sure Labour’s pre-GE stance on a YMS does not become an area where the Tories and the right-wing media see an opportunity to portray Labour as pro-EU, it would have been sufficient to simply stick to the line that a YMS was not currently part of Labour’s plans regarding UK-EU relationship. Going beyond that and equating it with FoM will either limit a future Labour government’s leeway in achieving the purported goal of a closer relationship with the EU or open it up to accusations of dishonesty and betrayal if a YMS does materialise further down the road.

Conversely, the YMS negotiation offer would have provide a great opportunity for Labour to start steering the public debate away from hysteric shouting, nonsensical slogans, and simplistic worldviews towards understanding and debating the details of the UK-EU relationship. Labour could have taken the opportunity to tell the public what is and what is not FOM. That may not be an easy task but given that any rapprochement with the EU will be depending on arduous negotiations over technical details, it is something the UK public will have get used to. Instead, Labour continues to let the terms of debates be imposed by a small right-wing elite that has less and less support in the population. Yet rather than appealing to the majority of people, Labour’s main priority seems to be to win back the votes of those working-class people who voted for Brexit in 2016 and for Johnson in 2019. Their strategy of doing so seems to be based on what these voters may have wanted before Brexit became a reality. It is also based on a biased view of what working-class voters are like.

Labour’s Lee Anderson

This was illustrated in astonishing fashion by the news that broke on Wednesday just before PMQ that Dover MP Natalie Elphicke was crossing the floor. Elphicke – an ardent Brexiter, former member of the ERG, and anti-immigration hardliner – is a controversial figure (notably due to her defending her ex-husband’s actions as a convicted sex offender) and not an obvious Labour MP given her voting record on workers’ rights (I have written about her before) and more generally her clearly right-wing – even by Tory standards – views.

Starmer’s motive to accept her despite her uneasy fit with Labour values and policy positions seems clear: Elphicke’s criticism of the government’s record on immigration hits Sunak where it hurts most. ‘Stopping the boats’ is arguably turning into Sunak’s first line of defence of his government’s. Seeing the outspoken anti-immigration MP for Dover defect to Labour due to the government’s failure to deliver on that promise is indeed one hell of a coup as one Labour MP is reported to have said. After finally getting the Rwanda bill through parliament and just when the claim about deterrent effect got some support in reality thanks to the statements by the Irish government, Elphicke’s mediatised defection and public statements completely undermine any claim to the government’s anti-immigration policy working. Given that the Conservatives plea to voters now is that they simply ‘need more time,’ this is devastating.

At the same time, Starmer accepting Elphicke constitutes another snub for the left wing of the party some of whom have been outraged about the move. Starmer accepting a controversial right-wing figure into the party may seem particularly surprising and offensive to left wingers after Jeremy Corbyn has been banned from standing as a Labour candidate over his antisemitism and Diane Abbott remains suspended for racist remarks in a letter published in the Observer.

Starmer’s stance on Elphicke confirms that his plan is to win the GE by appealing to defectors from the Tory party – including former Labour voters from the ‘Red Wall.’ More importantly perhaps, it also shows that he thinks he does not need or will not lose, left-wing voters by doing so. Here, the local elections may have confirmed him in his stance: There are clear signs that Labour is losing votes in areas with strong Muslim populations over its stance on Gaza. But the local elections show that Labour is gaining votes from all sorts of directions and groups of society – most importantly of course centrist Tory voters, but also working class 2019 Tory voters, and SNP supporters in Scottland. Might it be that Starmer feels safe enough to happily further antagonise his party’s left wing?

Whether or not this was a smart move electorally, it is a problematic one. Elphicke is to Labour what Lee Anderson was to the Tories: She may be seen as an exemplar signalling to a group of pro-Brexit, anti-immigrant voters that their views are welcome in the party. By doing so, there is a risk that Labour falls into the same trap of inadvertently patronising the working-class voters they want to win back by reducing them to crude xenophobic and culturally retrograde attitudes. Such views are held by a part of working class (and other) groups of society, but certainly do not represent working-class voters per se. Suggesting that they do – albeit implicitly – both gives these ideas more credence than they deserve and may push those who do not share them (working class or otherwise) to choose other parties.

Be that as it may, accepting right-Brexiters into the party will not help Starmer to free himself of Brexitism.

Dark times

Both in terms of Labour manoeuvring itself into a corner about Brexit and Starmer’s Labour alienating different groups of voters at a faster pace than Sunak’s Tories, it feels like for Labour the GE election cannot come soon enough. Unfortunately, the local election results made that less likely. Given the impending electoral disaster, Tory MPs will want to draw a salary from the state as long as possible and prepare for their future outside Parliament. Sunak will want as much time as possible – not because anyone (presumably not even the PM himself) believes that his plan is working, but in the hope that an unexpected event of sufficient importance will come along that averts the all but inevitable electoral defeat.

In the meantime, the country remains in a hostage situation where we are governed by an unelected PM who represents the interests of a small fraction of the population and imposes policies that do not solve any of our problems and make a lot of them worse. But perhaps the longer the dark times that have descended on British politics since 2016 last, the higher the chance that a new generation of politicians will be convinced that our country needs a fundamental reform to protect it from the charlatans and parasites that have imposed Brexit on us.

Brexit Impact Tracker – 21.4.2024 – Counter-Fire: In Defence of UK Higher Education

A couple of months ago I wrote about the UK Higher Education (UKHE) sector in the age of nationalism. The occasion was the government’s immigration policy, which has already had a devastating effect on UK universities and may have still more devastating ones depending on what the decision on post-study work visas will be (expected in mid-May). Immigration policy is one key factor explaining why 49 out of just over 200 universities in the UK have now introduced redundancy plans (see the University and College Union’s live tracker). Since then, the attacks on UKHE have continued unabated and indeed have become more widespread. They have partly moved away from blaming universities for their impact on ‘net immigration’ – I remain as unconvinced as ever that an overseas student is an ‘immigrant’ in the conventional sense even if some will become after their studies – back to the ‘value’ (more on this later) of university degrees and the quality of research done by academics notably in the Humanities and Social Sciences.

Given how dishonest, insidious and – yes – stupid, these attacks are, I felt another post on this was in order. As an academic, this is of course a subject close to my heart. However, I do think that what is happening to UKHE should be of interest to people interested in Brexit, because the HE sector provides an excellent example of a highly successful UK ‘industry,’ which is – however – incompatible with ‘Brexitism’ that has taken hold of UK government after 2016. UKHE, alongside farming, fishing, and financial services, may be one of the sectors most negatively affected by Brexit – although only partly directly because of Brexit (the exit of the UK from the EU) and more due to Brexitism.

Brexit and Brexitism impact on UKHE

Direct Brexit effects concern the plummeting number of EU students in the UK, which has halved since Brexit. That is not necessarily a financial problem for university, because the half that still comes to study in the UK normally pay twice the fees they would have paid before Brexit. But it does fundamentally change the composition of classes, but also the ‘risk profile’ of universities, as recruiting from a narrower range of non-EU countries becomes vital for financial stability.

Another direct Brexit effect was the prospect of the UK not participating in the EU’s ‘Horizon’ research funding programme. While the Windsor Agreement on Northern Ireland made it possible for the UK to rejoin the programme last September, much damage had been done by three years being outside the £82bn programme. By that point, leading researchers and talent had left the UK for EU countries and opportunities for funding of cutting-edge research had been lost.

However, beyond these direct Brexit effects on the UKHE sector, this post is more about ‘the other Brexit.’ Namely, the ‘Brexit of minds,’ by which I mean the project’s radical ideological underpinning, which Chris Grey aptly calls ‘Brexitism.’ Brexitism is a radical right ideology that goes far beyond the project of leaving the EU. As Brexit is failing, Brexitism moves on to find ever new targets to blame for the broken promises and maintain enough political support for the reactionary – and delusional – project of nostalgic recovery of Britain’s alleged lost greatness.

The attack on higher education is – just like EU membership, or membership of the ECHR, just one tool in achieving the ultimate Brexitist goal of turning cosmopolitan, liberal Britain into a reactionary, conservative Island, which I called Budapest-on-Thames in one of my posts.

Ripp-off

Ever since the Prime Minister announced a ‘crack down on rip-off university degrees,’ by limiting the student numbers on degrees that are considered ‘low value’ (more on that later), the attacks on a wide range of subjects in the social sciences and humanities have continued unabated. The government’s proposal from July 2023 targeted ‘poor quality courses’ defined as those with high drop-out rates and courses unlikely to lead to high-paid jobs. A the time, the PM stated that ‘too many young people are being sold a false dream and end up doing a poor-quality course at the taxpayers’ expense that doesn’t offer the prospect of a decent job at the end of it.’ Sunak’s definition of a ‘decent job’ is – of course – purely defined as one that pays well, not one that is meaningful, fulfilling, motivating to the person doing it.

Indeed, the metrics the government is using to assess the quality of degrees are deeply flawed. There are many economic, psychological, and social reasons for students dropping out of university. Some of them related to the socio-economic background of students. Therefore, all else equal, universities recruiting more students from disadvantaged backgrounds will see higher dropout rates than universities whose students have parents that can underwrite their children’s living costs during their studies no matter what.

Similarly, the same ‘less selective’ universities that give young people from less privileged backgrounds the chance of a university education are also the ones whose students’ earnings in absolute terms will not be as ‘decent’ as students going to more selective universities. Partly that’s due to a self-selection bias: If you go to a highly selective university, you are more likely to have connections and be from a social class that is more likely to get a high paid job. But in relative terms, what the government calls ‘low value degrees’ may actually be relatively more valuable to the people who take them, because they are crucial to their social mobility and higher wages than they would otherwise have. Thus the Sutton Trust underscores that less selective ‘post-1992’ universities do a lot more for social mobility than the more selective ones, because they take a larger number of low income students. In other words, while such university education may not lead to salaries the PM would consider ‘decent,’ students attending such universities, they are considerably better off than they would be without the degree.

The PM has of course very strong incentives to bash university degrees that lead to jobs with wages below a certain level, namely the reimbursement of student loans. Getting rid of degrees that lead to earnings below the reimbursement threshold (currently at £25,000 a year), will help the PM to reduce the student debt that the government has to write off. So, ironically, while the Coalition Government had promised higher tuition fees and lower public funding for universities would increase universities’ financial independence, the government’s obsession with ‘sound public finances’ comes creeping back through the back door via the student loan system.

More fundamentally the government’s and right-wing newspapers’ discourse very successfully reduces university education to a cost-benefit analysis and universities are accused of ‘ripping off’ students if their wages do not achieve some artificially defined threshold.

The price of everything, the value of nothing

Cost-benefit thinking has become the only game in town when it comes to higher education policy. ‘Value’ is narrowly defined as monetary value or return on investment for both students and ‘taxpayers.’ Education Secretary Gillian Keegan for instance considers that “[s]tudents and taxpayers rightly expect value for money and a good return on the significant financial investment they make in higher education.” Similarly, conservative MP Neil O’Brien tweeted a graph taken from Tim Leunig’s Substack (although it is actually one Leunig took from an IFS study).* The graph shows that ‘creative arts’ degrees are – according to this study – ‘net negative’ in terms of monetary returns to both the taxpayer and those who take them. I’m assuming O’Brien loves the graph so much because in his thinking it illustrates that fine art degrees are ‘worthless,’ a point right-wing populists have been trying to make more forcefully recently (see below).

Leunig too reduces university education to a cost-benefit analysis. Commenting on the government announcement of funding freeze for art degrees, he confidently proclaims that “[e]conomics and medicine students are good news for everyone. They earn a lot, repay their student loans, and pay a lot of tax.” While “creative arts’ graduate outcomes are uniquely awful.” That’s based on the estimated cumulated income of the average male creative arts graduate compared to people who have not gone to uni. Consequently, from Leunig’s one-dimensional economist’s viewpoint, the earnings variable indicates that creative art degrees are low value and therefore capping number of places is justified.

There is a lot wrong with Leunig’s analysis – most fundamentally perhaps the idea that individual earnings compared the cost or price of a degree course reflects its value either to the UK economy or to society. As an example, someone studying for a nursing degree and then working for the NHS will not be paid as much as someone studying finance or maths and then working in the City of London. Based on this example alone, most readers will probably agree that the salaries of nurses and bankers are a very poor proxy for the societal value of these professions.

Regarding degrees in the fine arts and other branches of the humanities, things are less obvious perhaps. Some ‘products’ created in the creative industries sectors can be ‘priced,’ e.g. the value of the Harry Potter ‘franchise’ (estimated at $43.1bn), which is the brain child of someone who studied French at Exeter. However, much of the societal value of creative arts, history, philosophy etc., is hard to put in monetary terms and they will lead to jobs in sectors that are typically low paid on average. That is no doubt why these subjects are particularly vulnerable to the commodification of education, which has gone further in the UK than in most other countries.

What is the “value” of cultural production – such as Shakespeare’s plays – to society? Who can tell! Arts and humanities are typically the realm where we move from classical utilitarian thinking about objectifiable ‘use value’ – that may be appropriate in some areas like engineering perhaps – not just to subjective perception of value (which neo-classical economists especially of the Austrian school have long acknowledged), to the question of intrinsic value. Indeed, the value of a degree in arts cannot be judged based on what returns the person studying it gets on their investment, not even what people are willing to pay for the products of artists, but only based on a much vaguer notion of the ‘good life’ and ‘good society.’ How much better is my life, because I can enjoy a play by Shakespeare, or a poem by Byron, or a painting by Millais? How much ‘richer’ is British society because we have authors like Zadie Smith, actors like Judi Dench, or film directors like Ken Loach? It is impossible to say – and I am sure I am not the only one thinking that people like them make a – literally – invaluable contribution to the country. They are valuable not because what they ‘produce’ has any specific, measurable utility, or because people are willing to pay money for what they produce. Rather, I would suggest, what they do is intrinsically valuable. Britain – and the world – would be a much ‘poorer’ place without people like them.

To some extent ‘basic economists’ like Leunig seem to recognise that there is some value in cultural production beyond money, but he seems relaxed about what limiting funding for such subjects will do to cultural production in our country. Indeed, according to him “[t]he most talented students will still do the courses they want to do.” That statement would of course only hold if there were a corelation between your talent and your choice of degree and if there were a mechanism that would guarantee that admissions tutors correctly spot talent and give them one of the rationed places when they apply. Besides the fact that ‘talent’ is presumably not a fixed quantity that you have when you start Uni, but rather something that you can develop in the right environment, I have no idea why Leunig thinks the mechanisms to distribute limited seats according to the ‘amount of talent’ exist in UKHE. Rather, the system may rely on ‘trial an error’ where there may be real ‘value’ in giving more people the chance to enrol on programmes they are motivated to pursue so as to make sure we do not miss out on people whose talent may not be reflected in their A-levels results or personal statements.

Are ’Mickey Mouse degrees’ low value degrees?

Not just economists like to dismiss ‘rip-off’ and ‘low value' degrees. The right-wing tabloid press has for a long time been bashing humanities and social science degrees, whose value is harder to understand than – say – a degree in dentistry. Seemingly spurred on by the government’s own plan to crack down on such degrees, papers from the Mail to the Telegraph now run regular articles ridiculing such courses. One Telegraph journalist for instance listed English literature, fine art, and photography among degrees that ‘damage your career.’ The Mail ran an article with quotes from an alleged former student on a media, journalism and communications degree at the University of Hull, which it dubbed the ‘ultimate Mickey Mouse degree,’ because it had the lowest average graduate salaries in the country after five years of graduating (£16,100). In an extraordinary follow up article, the Mail interviewed a former student who had dropped out after just three months, because according to her ‘many sessions were just watching a film and talking about it.’ The 18-year-old also seemed to object to having a module on ‘Disney studies’ that is said to provide an ‘in-depth exploration of the history and impact of Disney's global entertainment empire.’

The fact that an 18-year-old does not understand what she can learn from watching and discussing Disney movies probably says more about her than about the degree. Similarly, what exactly is objectionable to a module on possibly the most successful entertainment company on the planet is drowned in the gloating of the article’s writer who seems to know that the average Mail reader does not need an explanation why studying Disney Inc is somehow absurd. Indeed, even the insult of ‘Mickey Mouse’ degree is full of involuntary irony, given that Mickey Mouse is arguable one of the most successful (and importantly for this kind of people monetarily valuable) cultural product of all time.

Regardless, in characteristically populist manner, the article goes on to quote a range of random ‘no-nonsense’ people (by which is meant people who do not hold back with their opinions however ill-informed they are) from Hull – all of whom know that specific degree from hearsay at best – who wholeheartedly agree that such degrees are worthless. Invariable, the argument that’s being cited is that they do not lead to a ‘decent job.’ By which is meant one that pays a lot of money.

An interesting pattern here is that the blame is always squarely placed on the university degree and its content, never on the UK labour market. Indeed, the fact that many UK employers are not willing to pay decent salaries, has all sorts of causes many of which have nothing to do with the skills people have acquired at uni. Indeed, one of the bitter ironies of the excruciating debate about the quality of university degrees, is that the very same government that has presided over more than a decade of stagnating real wages and has tolerated and indeed encouraged a low-wage economy by busting trade unions, judges universities for not being able to guarantee its graduates well-paying jobs!

Errors of judgement

More often than not, attacks on universities are made by people with very large numbers of followers on Twitter, and very little understanding of universities and academic research.

Thus, Darren Grimes showcases his profound ignorance complaining about the fact that more than 50% of fees income at Russell Group universities now comes from foreign students. To him that means ‘that British universities are now cash cows for the world's global elite and not hubs of learning and excellence for British students.’ That seems like an utterly absurd statement. For one, it remains Grimes’ secret how foreigners who pay fees to UK universities can be portrait as parasites who extract money from UK universities. What Grimes also does not seem to know is that foreign students pay twice the fees of UK students. So, when 57% of income in leading universities – as per his post – are from foreign students, that actually means they are not a majority, but only around 29% of students. This illustrates just how large a contribution foreign students make to subsidies home students.

However, Brexitism does not stop at degrees taught at universities. The research academics in the social sciences and humanities do is also being targeted. An excellent example comes from a Twitter user called Charlotte Gill who has 34k followers on Twitter. She has taken it upon herself to expose ‘shocking’ research projects funded by UK Research Councils that according to her are ‘nonsense’ that needs ‘auditing’ (by her!) to make sure that taxpayer’s money is not going towards ‘woke waste’. Her audit, of course, is based on the most superficial possible of assessments of the research projects in question, i.e. reading the project title. The sort of studies Gill finds unacceptable include one project on ‘Decolonising Robert Louis Stevenson's Pacific Fiction through Graphic Adaptation, Arts Education and Community Engagement,’ one on ‘Digital Islam across Europe: Understanding Muslims' Participation in Online Islamic Environments,’ and another one on ‘Asexual Epidemics, Detectives and Spinsters: the construction of pathological asexuality in Victorian fiction.’

Just like the average Mail reader, who cannot grasp that there is any value in a degree in medieval poetry, Gill does not seem to understand the value of anything but the most mundanely useful things such as medicine. Anything that is valuable to society for reasons other than satisfying an immediate material or physical need seems beyond her. The ‘model of man’ underlying Gill’s worldview seems properly animalistic, where people only seek to cover their basic needs – everything else is an unaffordable luxury. (I do wonder what she would make of some of Tim Leuning’s published work, e.g. on the topic 'Was Dick Whittington taller than those he left behind?’ But I guess the fact that that paper was written by an economist may make it ‘useful’ in her view regardless of its content).

Even the crudest theories of motivation – such as Maslow’s pyramid of needs – have for decades acknowledged pretty much the opposite, i.e. that satisfying one’s basic needs are only the lowest level of human motivation. Humans strive for aesthetic and artistic expression as much as they strive for a roof over their heads. That’s what makes us human. Gill and probably a large part of her 34k followers, of course, do not understand that. To people like her, a research council spending £800k on a ‘Shakespeare study’ is an unjustifiable fancy not an investment in our cultural heritage and an important contribution to an intrinsically valuable public good.

I am of course not arguing that research projects and outputs should not be challenged and assessed. What I am arguing is that a Twitter thread looking at project titles is not the way of doing it. There certainly is a lot of nonsense being published in academic journals. The reason for that, however, is not ‘woke waste’ or the existence of some inherently unworthy subjects, but rather the incentives created precisely by the commercialisation of HE. Many scholars – especially early career ones – are so desperate to get the publications they need to get and keep a job that they would do almost anything to get publish. There are even software packages explicitly designed to assess whether you publish enough or are at risk of ‘perishing.’ This pressure has led to a situation where the number of publications and status of the outlet where research is published is more important than its content. This in turn has led to all sorts of perversions in academic research, such as HARKing or worse still (some high profile) cases of alleged data fabrication.

Yet, like in the case of universities providing a large number of degrees that do not cost much to teach but charge high fees, these practices are not the result of inherent dishonesty of academics or universities, but a rather predictable result of a system where higher education and research has become increasingly exposed to market forces and competitive pressures. The far-reaching defunding of university sector by the state has made universities and academics masters of catering towards what the ‘customer’ wants. Sometimes that pushes them into questionable practices. Some universities now openly acknowledge the perverse effects of that system. The University of Zurich announced a couple of weeks ago that it will withdraw from the Times Higher Education ranking – despite being ranked in the ‘Top 100’ – because such rankings create perverse incentives.

The utilitarian trap

One thing that particularly upsets me in all this is the fact that the reaction of UK universities to the widespread smear campaign against social science and humanities has remained very muted. There was some reaction from the Russell Group – the professional association representing UK’s ‘elite’ universities – to false claims made in a Sunday Times article about international students on pre-sessional courses. But by and large, the broadside against social sciences and humanities has gone largely unchallenged by universities. Even people trying to defend the value of university education have to parrot the language of ‘return on investment,’ e.g. Professor Mary Vincent, Vice President for Education at the University of Sheffield who succumbs to that narrative in her defence against the ‘rip-off degrees’ language, stating that “[v]alue for money in our education system is crucial, especially when the economic purse-strings are so tight.”

The reason for this is that top managers in UK universities have long been convinced of the economistic cost-benefit, ‘price-of-everything-value-of-nothing’ ideology that has penetrated UKHE so much. Indeed, top university managers at Goldsmith, Roehampton, Kent, etc. do not need much convincing that social sciences and humanities are worthless. Their management of their universities has been premised on that idea for a long time, destroying some of the country’s finest centres of excellence in these areas. Similarly, Edward Peck, Vice-Chancellor and President of Nottingham Trent University and panel member of the independent Review of Post-18 Education and Funding seems to agree with the government’s crackdown on ‘rip-off degrees.’ Clearly, UK universities’ top managers too have fallen into the utilitarian trap.

There is two ways of challenging the attack on UKHE. One is to push back against the Brexitist analysis on its own terms, e.g. by pointing out that if the PM wants more maths and less arts, humanities, social sciences in school, the closure of university maths departments will be self-defeating.

Adopting that approach, we could also ask why we would not apply the Brexitism logic to sports and football in particular. After all, the vast majority of professional footballers are foreigners (nearly 70% in the case of the EPL), who use English clubs as ‘cash cows,’ and bring their families – thus increasing net migration. Brexitism may excuse professional footballers of course, because they would probably be deemed to have a ‘decent job’ given that they are making millions. Although, if we exclude the fat cats in the English Premier League, the average footballer salary in the UK is between £20k and £29k – lower than some of the graduates from the Mickey Mouse degrees that are being decried. So, why not turn Brexitism on football? Well, simply because it’s not a good object of the culture war because it does not divide us into ‘elite’ versus the ‘real people.’ University education does. That should illustrate that the attack on UKHE is largely driven by political motives and made entirely in bad faith.

More fundamentally, Simon Pegg’s – shall we say ‘passionate’ – rejection of the PM’s push for maths until 18, comes closer to the second approach, which is to tackle the premise that arts and humanities (and social sciences) are worth- and valueless. In a recent post, I have written about ‘inverting the red lines,’ by which I meant that we stop pushing back on Brexit based on the criteria and values that Brexiters impose on us. Instead, we should start seriously challenging those criteria and values themselves. The same goes for Brexitists’ attack on UKHE. Instead of asking what’s the ‘worth’ of a degree, we should be asking what its value to society is. An Oxford PPE may have tremendous ‘worth’ in terms of ‘lifetime earnings,’ but its value to society may be negative if we look at the impact politicians who obtained that degree have had on the country. Conversely, a ‘Micky Mouse degree’ may produce graduates whose creativity and artistic expression may add some intrinsic value to our country, even though they may be paid a lousy salary for it.

So, the point – like with Brexit red lines – is that we do not just try and defend UKHE on the terms imposed by Brexitists but start to impose our own narrative on why social sciences, arts, and humanities are intrinsically valuable for our country. Only if we start doing that is there any chance to free ourselves of the economic doxa, which has taken hold of all areas of our lives and makes any fundamental change of the current failing system impossible.

 

 

* The IFS provides many very valuable studies on financial issues. On Higher Education, however, it has the ambiguous effect of providing a valuable source of financial aspects of UKHE and buying into and contributing to the commercialisation and monetarisation of education, see e.g. its report ‘what is a degree worth?’ (narrowly defined as graduates lifetime earnings).

Brexit Impact Tracker – 22 March 2024 – Ruling the Waves: Of trade nostalgia and inverting red lines

Almost exactly two years ago I wrote about post-truth politics in the UK. At the time, the example I discussed was then Home Secretary Priti Patel’s lies about a visa application centre in Calais for Ukrainians fleeing the Russian invasion. While the Home Secretary insisted that she had established such a centre, factual evidence suggested the contrary. The past few weeks since my last post have shown that post-truth politics have become an established element of post-Brexit British politics. Trade has become the area in which this is most conspicuous. The most egregious case was Secretary of State for Business & Trade Kemi Badenoch’s claims about negotiations of a free trade agreement (FTA) with Canada.

Are there trade talks taking place between the UK and Canada?

Two years ago one section heading of my post was ‘Is there a UK visa application centre in Calais?’ Today I can use a similar heading regarding the trade negotiations between the UK and Canada. In late January, it was widely reported that negotiations about enhancing the interim agreement from 2021 – that had rolled over the EU-CDN trade relationship after Brexit – had broken down. The reason was primarily differences about meat and cheese exports.

Part of that interim deal concerned rules of origins notably for manufactured goods in the automative sector. Under the agreement parts produced in the EU could still be considered being produce in Canada and the UK for the purpose of rules of origins (so-called ‘cumulation provisions’). Given the close integration of UK car manufacturers’ supply chains with EU supply chains, this was needed for UK manufacturers to be able to continue exporting tariff free to Canada. However, these interim arrangements expire on April 1, 2024; Posing a significant threat to the competitiveness of UK cars in Canada – a top 10 export market for UK car manufacturers – as the chief executive of the industry body SMMT noted in a letter to Labour MP Liam Byrne the the chair of the Commons’ Business & Trade Select Committee.

Yet, Badenoch had claimed on January 29th, four days after she had unilaterally suspended the talks, that discussions about food standards and the ‘cumulation provisions’ were still ongoing. Her words in the Commons were that she wanted to “state explicitly that the talks have not broken down.” Remarkably, those words were officially contradicted by Canada in a letter sent to the Commons’ business committee by Canada’s High Commissioner to the UK Ralph Goodale. The letter – sent on February 16, 2024 – states as explicitly as the Business & Trade Secretary had done that “there have been neither negotiations nor technical discussions with respect to any of the outstanding issues - including British access to Canada's Tariff Rate Quotas for cheese and the approaching expiry of cumulation provisions respecting Rules of Origin.” The chair of the Bussinss & Trade Select Committee Liam Byrne then raised the issue in the Commons sardonically asking “How do we get to the bottom of whether these trade talks are going on in the Secretary of State’s mind or whether they’re happening in real life?”

Post-truth politics thrive on normalisation. After the 100s time the PM, a Secretary of State, a minister, or an MP has lied, we start accepting it as normal. So, it is useful to just recap in somewhat more general terms what has happened here, to remove it from the UK post-Brexit context where this level of dishonesty barely seems newsworthy: A Cabinet minister lied to Parliament stating that trade negotiations with a foreign country were ongoing when she herself had suspended them a few days earlier. A government representative of the foreign country concerned then writes to the UK Parliament to contradict the Cabinet minister’s claims about something very factual, that probably only few people would think you can lie about on the record and get away with. Yet, getting away with it she did.

In my post from two years ago, I used Hanna Arendt’s distinction between philosophical truth and factual truths. While the former always will be and should be debatable, factual truths shouldn’t. Whether or not the UK government is negotiating a new trade deal with Canada is such a factual truth. One may be forgiven to think that such a blatent lie by a cabinet minister in Parliament would have consequences. But lying to Parliament has become so common in British politics, that I do not think there were even claims for Badenoch to resign. To the contrary she is still considered as potential future Tory leader (alongside Penny Mordaunt whose popularity mainly rests on her having held a ceremonial sword for over an hour). This may be because people know that misleading Parliament and thus breaching ministerial code is not considered a resignation matter anymore in post-Brexit Britain; or perhaps because Badenoch has admitted other very serious – possibly criminal – acts – namely hacking into an opposition MP’s website – without there being any consequences; Or else, maybe Badenoch is simply involved in too many public rows and spats – such as the one involving former Post Office chair Henry Staunton – for anyone to be able to keep up. Regardless, the fact that such behaviour goes largely unchallenged and completely unpunished in post-Brexit Britain illustrates the state of British political culture, which will take decades to rebuild once the current government has been ousted from power and the Conservatives can hopefully return to sanity.

The politicisation of trade

But let us turn from personalities to the substance, i.e. trade policy: I have repeatedly written about the interesting phenomenon of the politicisation of trade deals in the wake of Brexit (see e.g. here and here). The UK-Canada trade negotiations are just another example of this trend where trade policy has become part of a symbolic policy for domestic consumption rather than a technical matter expected to lead to real-world improvements in UK trade performance.

An important element in the government's strategy to use trade policy for domestic purposes are the memoranda of understanding (MoUs) that the Department for Business & Trade is negotiating with individual US states. In the absence of any progress on an actual Free Trade Agreement with the USA, Brexiters have moved to try and convince the UK population that MoUs with individual states are just as good. The latest one was signed by Badenoch and Texas Governor Greg Abbott last week.

Trade Minister Greg Hands took to Twitter (X) to celebrate the fact that the UK has now signed state-level pacts with eight US states ‘boasting a combined GDP of £5.3tn’ (the states concerned are Indiana, North Carolina, South Carolina, Oklahoma, Utah, Washington State, Florida, and Texas). Similarly, HMG’s official press release stated that the MoU took “the number of agreements with US states up to eight – worth a combined GDP of £5.3 trillion, which is greater than that of Japan and equivalent to a quarter of the US economy.”

These statements – as always in the case of Brexiters’ statements about trade – are of course dishonest and highly misleading in two fundamental respects.

First, they try to convince people that the size of the economy you are concluding ‘trade deals’ (more on that later) with, is a direct indication of the benefits it will bring to your economy. That is only partly true. Much will depend on what your companies have to gain from access to the partner markets, i.e. what your companies will be able to sell there. Conversely, much will also depend on what the partners’ companies will sell in your country and whether that will improve consumer welfare (e.g. through lower prices or higher quality for instance) and how it will impact your own companies‘ selling the same products.

The Governor of Texas’s web page announced the deal noting that ‘Texas is No.1 among the states for exports to the United Kingdom’ and ‘the United Kingdom have invested $8.6 billion in capital investment through 326 projects in Texas, creating more than 18,200 Texas jobs.’ The first of these statements may be great news for UK consumers, as it may imply, they can buy goods they would not have otherwise access to, or they can buy them at cheaper prices. However, for UK firms it may mean more competition. That in turn may force them to increase productivity, which is one of the often assumed benefits of trade integration. Yet, increased competition may also be the result of firms being able to sell more cheaply because they work to lower standards in terms of environment, labour rights, health and safety and the like. Again, it depends on the precise terms of the agreement to know whether this is indeed the effect, but making it easier for Texan companies to access the UK market may constitute considerable challenges for UK producers given the increasing productivity gap between US and European companies. Perhaps that’s not a bad thing, given that competition may increase incentives to carry out those productivity enhancing investments that the UK so desperately needs. But in the absence of access to suitable sources of financing or some other reasons for not undertaking those upgrading investments it may simply mean that some domestic firms will go out of business. That’s what happened to many companies not just in the UK, but also the US – especially the Midwest – when China joined the World Trade Organization (WTO) and consumers started buying Chinese goods instead of domestically manufactured ones and firms started off shoring manufacturing to China (the so-called China shock). (And those trends also directly relate to support for Trump and Brexit).

Similarly, the second statement by Governor Abbott – the fact that UK firms have invested $8.6bn in Texas creating 18.2k jobs there – can be either good news or bad news for the UK. It is good news if that investment is the result of UK companies’ expanding due to access to a new market. It is bad news if it is the result of UK companies preferring to produce in Texas rather than in the UK. Which one it is would require a much more in-depth analysis of the evolution of UK-Texas trade and investment relationships than I have space here. But suffice it to say that reality is a lot more complicated than Brexiter propaganda allows for and the devil – as always – is in the detail.

The second way in which the official press release about the UK-Texas MoU and ministers’ statements around it are misleading is the fact that it actually is not a free trade agreement that has been signed. As many people have noted before me, these MoUs are declarations of intent to cooperate and collaborate. The one with Texas is titled a Statement of Mutual Cooperation (SMC) and is strewn with phrases describing the purpose of the agreement in terms such as ‘identify’ obstacles to trade, ‘address’ (not ‘remove’) trade barriers, and ‘sign-post opportunities’ and ‘encourage cooperation’ through ‘sharing of best practices’, and even simply ‘reaffirming existing obligations’ when it comes to public procurement under the WTO Agreement on Government Procurement (WTO GPA).

The most concrete provisions in the SMC are those stating what the MoU is not, namely an FTA. Thus, section 10 point 2 states that ‘This SMC is solely an expression of the Participants’ intention to establish a mutually beneficial relationship and is not an international agreement or treaty and as such does not create legally binding rights or obligations under domestic or international law.

Most importantly, of course, US states do not have the authority to remove tariffs and many non-tariff barriers to trade, because they simply are the primary authority of Congress and the Federal Government. As such, Badenoch’s statement that thanks to the UK-Texas SMC and the other seven state-level MoUs ‘UK firms now have access to states with a combined GDP of £5.3 trillion - equivalent to a quarter of the whole US economy’ is misleading in the sense that of course UK firms had access to these states before and significantly improving market access would require removing tariff and non-tariff barriers, which in turn can only be done via an FTA with the US government.

The bright side of MoUs

That is not to say that these MoUs with US states are completely useless. The point I am trying to make here is that the UK government is using them as symbolic policy and that its communication about what they are and what they can achieve is misleading.

A very recent report by the British American Business Network takes a close look at the MoUs the UK has concluded with US states so far. The report notes that the one common objective in all eight MoUs is to “address barriers to trade and/or investment,” but that only three cite “increasing investment” in both places as an objective of the agreement (North Carolina, Florida, and Texas). Others do not mention investment at all.

The report also notes that only the first MoU signed (the one with Indiana) mentions “removing trade and investment barriers” as an explicit objective, and only the ones with Indiana and North Carolina mention “removing trade and investment barriers,” while all others – perhaps more realistically – only talk about “addressing trade and investment barriers”.

The report also highlights the relatively limited extent of the MoUs in terms of the means of cooperation, which are limited to “visits and missions,” “information sharing/best practice exchange,” “joint symposia, seminars, workshops exhibitions, and training”, “academic cooperation,” in one case (Oklahoma) a “social media campaign”, as well as “private sector partnerships,” and in some instances unspecified “capital investment.”

These means of cooperation are ‘neither legally binding nor do they change tariffs or market access,’ but according to BABN ‘this kind of trade promotion activity can have real value’ in activating local stakeholder networks and increasing visibility of opportunities.

The one area where the MoUs may open opportunities for market access of UK companies concerns public procurement, which is included in all MoUs and would improve at the very least information about public tenders in some US states, but in some cases comes with a (legally non-binding) commitment to improve treatment of UK companies compared to companies from other US states or third countries.

Yet, BABN also concludes that ‘a lot hinges on the execution of the commitments that have been made by both sides.’ Some of the MoUs have indeed led to resource commitment – e.g. the UK establishing a Government Office in North Carolina and South Carolina ‘contemplating’ opening a UK office, in addition to its European office in Munich. Such activities can increase the visibility of opportunities, which is crucial to the value added by such MoUs.

However, here, my pessimistic interpretation of trade policy as largely a symbolic act used to cover up the failure of signing promised FTAs with big players like the US and India, leads me to be very sceptical of the value of these MoUs, because it is doubtful the government has any consistent strategy to follow through with the necessary resourcing and implementation steps. It should be noted for instance that no other Government Offices like the one in North Carolina (which incidentally was established in 2020, i.e. two years before the MoU was signed) have been opened. My pessimism seems to be confirmed by the BABN that notes that “[s]o far there is not much available [in terms of public information and visibility-enhancing activities] beyond the MoU texts and Working Group statements.” That may change, or it may not, depending on how serious the UK government is about the real-world potential of these agreements.

Be that as it may, it is important to note that whatever these state-level MoUs amount to, they are extremely unlikely do offset the loss in trade due to the loss of access to the EU single market and certainly are not a substitute for the promised FTA with the US in terms of market access.

Finally, an FTA with India!

While the UK government seeks to convince people that post-Brexit trade policy is a great success, the news reached us that an actual FTA had been concluded with India. Only, it was not the UK, but the European Free Trade Association (EFTA) that has manged the feat of concluding an FTA with India. After the India-Australia and India-United Arab Emirates FTAs, this is probably India’s third most significant FTA. Ironically, the announcement came the same week that UK and Indian negotiators announced that their last ditch efforts to conclude a UK-India FTA before elections in both countries had not succeed and negotiations were now put on hold.

So, how did the four small economies of Iceland, Liechtenstein, Norway, and Switzerland manage what neither the EU nor the UK have managed so far?

The first thing to note is that it took a long time to reach a deal (16 years) and serious progress was only made after 2020 when India decided to abandon the Regional Comprehensive Economic Partnership (RCEP) with 15 other Asian countries, which the Government of India (GoI) deemed too dominated by China. India’s exit from RCEP made the GoI more interested in an FTA with European countries and the small EFTA economies proved pragmatic enough to take advantage of this opportunity.

A key element for the successful negotiations was the openness of EFTA states to accept Indian request for relaxation of work visa requirements, notably for service sector employees and the self-employed. Plus, managerial staff of Indian companies working in EFTA countries can now bring their families, while Indian students may qualify for post-study work visas, albeit not for permanent work permits (see here in German).

This is of course precisely the area in which the UK government – committed as it is at least since 2010 to bringing down net migration – has very little leeway in its negotiations with India, which has proven to be one of the key stumbling blocks in the process. It should also be noted, however, that Switzerland is not in a dissimilar position, given that a popular referendum a few years ago has led to a constitutional commitment to give Swiss workers priority over foreign workers (I wrote about this mass-immigration initiatives a few years ago). Here, the details of the deal with EFTA may be insightful for British negotiators (see Annex 6c on movement of persons supplying services).

Another important element of the EFTA-India FTA that reportedly was key to a deal concerns the chapter on investment promotion. Here the EFTA states promise foreign direct investments of U$D100bn and the creation of a million jobs in India over the next 15 years. The Neue Zürcher Zeitung’s commentator [in German] calls this provision ‘very unorthodox.’ For one, the sum seems enormous, given that to date the EFTA countries only have invested a combined U$D10.7bn in India. For the other, it is also unorthodox in the sense that the governments of the four EFTA countries can of course not direct private companies to invest in India. Indeed, the promise has been interpreted as a bet on India’s growth. Indeed, the potential seems enormous given that India only accounts for 3% of world GDP compared to China’s 18% while both countries have similar populations. So, the EFTA states may simply rely on the fact as India catches up with China, EFTA FDI into India will automatically reach the U$D100bn in the next 15 years.

(incidentally, it is telling that the BBC reported on the EFTA-India deal using the misleading language of a ‘$100bn free trade deal,’ when that figure merely refers to the intended amount of FDI from EFTA into India over 15 years. The $100bn are not additional wealth created by the deal, or wealth directly accruing to the countries that are part of the deal, even less to their populations. Perhaps Brexiter thinking on trade is starting to infect how the British media in general reports on these matters, which would be another regrettable Brexit damage).

In the meantime, for EFTA exporters the agreement has very concrete benefits, most importantly a very significant reduction of import tariffs – e.g. of 20% in the case of watches and machine tools – providing them with a considerable competitive advantage compared to EU and UK exporters.

This contrasts with Brexit Britain where the Trade Secretary – fighting the ever more oppressive weight of the reality of trade damage (see for instance this latest CER report) – has to resort to the silly trick of claiming a British post-Brexit export boom by simply not adjusting figures for inflation. That may sound like a technicality, but as Chris Grey put it brilliantly, it essentially is ‘like someone who earns £30K a year saying that they are much better off than their granddad was because he only earned £25K when he was their age.’

Badenoch, like any fanatic, remains unperturbed by reality and boasted in the pages of the Express about Britain’s’ alleged leading position as trading nation. That boast was merely based on the number of trade deals concluded since Brexit; completely ignoring the fact that the vast majority of them were simply rolled over from pre-existing EU agreements (e.g. the UK-Canada one mentioned above) and that those who were not are of very little value (e.g. the ‘gargantuan’ CPTPP agreement with Pacific nations is expected to add 0.08% to UK GDP) and some are indeed damaging to the UK economy.

But all that said, it is of course pointless to hope that Brexiters will care about the economy or the living standards of British people. Rather, as Badenoch suggests, in Brexit Britain even trade policy is primarily about nostalgia and the pride of a country that was ‘[o]nce mocked as a nation of shopkeepers’ but wants to ‘stay true to our heritage as a global trading nation that ruled the waves.’

Inverting the red lines

Badenoch’s reference to a Britannia that rules the waves illustrates a key feature of Brexitism that I have also previously written about, namely the believe in British exceptionalism and supremacy as illustrated by a glorified past. This core feature of Brexitism is increasingly becoming the only thing that is left of the whole project.

Lee Anderson’s defection from the Tories to Reform UK last week and his justification that he ‘just’ wanted his country back further illustrates Brexitism reducing to its ugly core; namely politics exclusively geared towards the selfish-pursuit of power, while appealing to parts of the population’s longing for a simpler, safer, and more economically secure time. As Chris Grey convincingly shows in an excellent comment on what it means to want one’s country back, most people look for that simpler time in the past, even though we know they will be looking there in vain.

Yet, in British politics it has become a taboo to call out people who ‘just want their country back,’ because politicians of all colours seem to buy into the argument – or at least do not dare completely rejecting it – that this is what a majority of people (or at least ‘millions of people up and down the country’) want. It is the fear that Lee Anderson and other Brexiters indeed speak for the ‘Red Wall’ voter that has led Labour to a level of cautiousness about Brexit that borders on impotency. It is this fear that explains Kier Starmer’s many red lines on Brexit (no rejoining, no single market, no customs union, no free movement of people…).

The longer the Brexit drama continues, the more visible the economic and political damage becomes, the less this approach seems tenable. Rather than having red lines imposed on us by those who grabbed power after an ill-advised and ill-designed Referendum eight years ago, the rest of the country needs to be given a voice and needs to be allowed to say just how much Brexiter shenanigans we are willing to put up with. At one stage someone in British politics will need to have the courage to stand up and tell Brexiters that enough is enough. Somone needs to tell them: ‘Right, you won in 2016 and 2019 and we’ve let you have a go at ‘getting your country back.’ We’ve looked on while you were trying to turn your nostalgic fantasies into reality. We told you it won’t work. You’ve had eight years. Look where we are now. Here is our red line: This much damage and no more!’

In other words, it is time to invert the red lines and tell Brexiters that they have squandered their chance to prove us – Remainers – wrong. The red lines in UK-EU relationships cannot be defined by those brought to power thanks to a chance majority in a badly designed referendum. Rather, the red lines need to be defined in terms of the very real damage Brexiters are doing to the UK economy, politics, and the country as a whole.

That does not mean dismissing the grievances that led people to vote for Brexit, but rather to start a serious conversation about what the causes of these grievances were, what role the EU did and did not play in them, and what sort of economic and political reforms are needed to find real solutions rather than the perhaps cathartic, but ultimately self-defeating Euroscepticism.

Will this happen any time soon? No doubt not before the General Election – and that may make some strategic sense given that all that seems required for Labour to win the election is to avoid any huge mistakes and let the far right (Conservatives and Reform UK) continue devouring themselves.

After the election, however, it will be crucial to invert the red lines and do what is best for the country not for the screaming and screeching minority of nostalgic fantasists who want their country back. Of course, the plutocrat owned right-wing press will rip into anyone challenging the notion that the Brexit mess is what a majority of real Brits want. But it needs to be challenged if we are ever to be free from the shackles of self-destructing far-right nationalism and if we want to get out of the hostage situation in which a small, well-funded minority of far-right extremists has held the country since 2016.

While taking on the Conservative Party with its newspapers and rich donors and Reform with its increasingly loud platform GB News may be a daunting prospect for anyone on the frontline of British politics, they may take courage in recent polling figures. They indicate a genuine electoral wave away from the Conservatives, reducing support for the two mainstream far-right parties to the core of unconditional supporters. And that core is far from a majority of the electorate. Indeed, the most recent polls have the Conservatives at 19% of voting intentions and Reform at 15%. That’s a total of 34% intending to vote for far-right parties, which is nearly 10% less than during the 2019 GE. It is unlikely that people who still support the Tories or Reform would ever vote for a centrist party or abandon their strong believes about returning to a mythical British past. As such, they are most likely a lost cause for any party who wants to move British politics back onto more reasonable ground with forward-looking policies.

Conversely, the 66% of people who would not vote for either of these parties most likely will also be increasingly more worried about real world Brexit damage than about ‘red lines’ regarding the technicalities of the relationship between the UK and the EU. An interesting report by the Conservative Group for Europe suggests that there could even be space for cross-party agreement on a rapprochement with the EU. This would be particularly the case if a second electoral wave gathers pace and other extremists follow Anderson’s example of abandoning the Conservatives for Reform, allowing the Tory party to return to a more centrist, ‘one nation’ path.

Overthrowing the tyranny of the loud Brexiter minority will take courage and resilience given the hateful and dishonest style of politics Brexiters have become so proficient in. But someone will have to muster that courage. The politician who manages to rule the current electoral waves may be able to steer Britain away from its current course, which the country simply cannot afford to pursue for much longer.

Brexit Impact Tracker – 8 February 2024 – 1,461 Days Later…

On 31 January 2024, we celebrated the fourth anniversary of Brexit. Well, not very many people were celebrating. It is quite telling that the three Brexit-related story during its Birthday week were all about damage or damage limitation, not Brexit benefits. Chris Grey’s latest blog post discusses the three big events in detail: the stalling of the UK-Canda trade negotiations (probably a good thing for most British farmers, but contradicting Brexiter promises on easy new trade deals), the entering into force of additional import controls on goods from the EU (for which the government and border control posts are clearly woefully unprepared – despite having had four years to get ready), and a breakthrough in Northern Irish power sharing (although that is only solving problems that would not have existed without Brexit). The Brexit mood in the country is low.

Recent polls suggest that a majority (57%) of British people believe Brexit has been more of a failure than a success, and a similar proportion think it was wrong to leave the EU, against only 33% thinking it was right. According to a Financial Times survey, 75% of companies trading with the EU consider Brexit has hurt them. David Frost feels ‘Remainers have never been stronger’ (of course he thinks that‘s a bad thing), and even the IEA thinks Brexit was a mistake.

A video from May 2016 by Daniel Hannan was widely shared on social media showing the stark contrast between what we were promised back in 2016 and where we are at in 2024. Indeed, rather than sunlit uplands, Britain in 2024 feels closer to a dystopian desolate scene from the London-based horror flick ’28 Days Later…’ That may actually be an apt analogy, 1,461 days later it is becoming clear that Brexit is not a one-off mistake – say, like betting on the wrong horse, which hurts once but then stops. Rather, it is like a virus that turns people into zombies. Once unleashed, it spreads, mutates, and infests ever new areas of our lives.

The latest case in point is UK Higher Education (UKHE) which, it would seem, Brexiters have made the next target of their desperate attempts to cling on to power. For months now, they have deployed Brexitist nationalistic culture-war propaganda tools to politicise one of the country’s most successful export industries.*

The right-wing populist animosity against ‘lefty academics’ – especially in the social sciences and humanities – certainly is a key cause for sustained attacks on the quality of university education in the UK. This has led in July last year to the government launching a policy allegedly cracking down on ‘rip-off university degrees.’ The latter are simplistically defined as degrees with high drop out rates and low graduate salaries – completely neglecting the blatantly evident factors that explain why some very valuable degrees for social mobility in the country may lead to less well-paying jobs or may have more students who are struggling on them.

A less obvious but increasingly important cause for UKHE to come under attack – perhaps surprisingly for people not familiar with the sector – is the dramatic post-Brexit increase of net migration figures. Migration has been a Tory obsession for decades and consecutive manifestos have promised to reduce net immigration dramatically. The Brexit referendum was won to no small degree due to fears over and promises about immigration levels. Given that Brexit has not delivered on these promises, our struggling Prime Minister is desperate to have something to show for all the government’s rhetoric about ‘delivering for the people.’ But the ‘Stop the Boats‘ three-word slogan stubbornly refuses to turn into a functioning policy. So, foreign students have become the new target for the Tories to try and avert an increasingly likely defeat in the next general election (GE)…As a result Brexitism has spread to higher education, quite possibly wrecking yet another sector of the UK economy (after fishing, farming, transport, finance…).

UKHE in the age of nationalism

For context, since the reforms of UK university funding introduced in 2012 by David Willetts under the coalition government, UK universities almost exclusive depend on student fees to finance themselves. The reform uncapped student numbers and allowed universities to triple undergraduate tuition fees. According to one study from 2016, it reduced  “public  spending  on  university teaching by around £3 billion a year and enabled tuition fee income to rise from £2.6  billion  to  £8.1  billion.” Yet, undergraduate fees for home students are caped and while since 2017 they are meant to increase with inflation, so far consecutive governments have temporarily frozen the cap of £9,250. This has meant universities have massively expanded their post-graduate programmes to attract overseas students whose fees are uncapped. Given the UK ‘s world-leading (yes, genuinely!) universities, the attractiveness of the UK for students who want the ‘Hogwarts experience,’ and the English language, this plan worked very well for over a decade. The post-graduate taught (PGT) sector expanded, universities made enough money to finance their operations and invest in new buildings for even more PGT students; They hired new staff, opened new campuses both in the UK and abroad. The sector grew…The Tories are about to push a pin in that balloon!

Turning the screw on foreign students is an easy way to bring down the ‘net migration’ headline figure. Indeed, contrary to the Rwanda plan, it is a policy that will actually have a real-world effect. A few changes to visa rules are sufficient to turn the flow into a drip. The government did just that in January when rule changes about ‘dependent visas’ came in to force that prevent foreign students from brining their families to the UK while studying here. There is also a decision expected on whether or not the government will – once again – restrict or even abolish graduates’ rights to obtain a work permit after graduating from a UK university. Such a post-study work visa (PSWV) existed until 2012 when it fell victim to then Home Secretary Theresa May‘s ‘hostile environment‘ policy. It was reintroduced by Jo Johnson in 2019 (taking effect in July 2021) – seemingly delivering a Brexit benefit that Hannan had written about, i.e. letting more foreign students in now that we did not have all the Europeans coming here using their freedom of movement. If that was a Brexit benefit, it may turn out to be a short-lived one.

This comes at a time where other attractive Anglosphere countries like the US and Australia open their boarders for foreign students offering them very attractive visa conditions, including post-study work visas with no time limit on employment after graduation. (Canada, on the other hand is going down the UK route: blaming international students for housing shortages, and restricting numbers). As a result, student flows to the UK are drying up, leaving many universities in very difficult financial positions. The government is doing real damage to UKHE

Whatever one may think of the commodification of education and the very high fees students must pay for education, UKHE is one of the most successful service export sectors the country has produced. It contributes £130bn to the UK economy, with an estimated £41.9bn through foreign students. Many of its universities are truly world-leading and very attractive places for people to study and do research. The spread of the Brexit virus to this sector risks turning it into a walking dead.

Mickey Mouse and parasites

At first glance, the government ‘s approach to foreign students seems puzzling. After all, foreign students pay twice the fees of their UK counterparts and thus cross-subsidies home students; they also contribute to the national and to local economies by spending money while living here; and they contribute to the Welfare state through the Immigration Health Surcharge of £470 per year. The living costs for studying one year in London – excluding fees – is currently estimated at around £16,000; around £12,000 outside of London. That’s £16,000 pounds per student spent on goods and services from UK companies, shops, restaurants, clubs, cinemas, museums, theatres, venues, stadiums.

Moreover, while it is undeniable that foreign students constitute an important source of immigration, surely that should be welcomed. They have been educated in UK universities, acquired high skill levels, and can make an important contribution to the UK economy, which suffers from low productivity notably due to the lack of a skilled workforce. So, at first glance, the case against foreign students seems a very difficult one to make…

…and yet, the Brexit virus manages to turn something that even the most anti-intellectual Brexiter should celebrate – a world-leading export industry delivering world-leading services to its clients (to put it in terms these people can relate to) – into something toxic. Where I see bright young people full of enthusiasm eager to broaden their horizons and learning about Britain; Brexiters see parasites that come here to take our houses, eat our food, crowd our trains, and take our jobs. Where I see an incredible richness of cultures, experiences, histories, and values fostering mutual understanding and new ways of thinking; Brexiters see invasion, contamination, and impurity. Where I see the leaders of tomorrow; they see a threat. The Brexit virus has mutated again and is turning juicy meat into putrefied lumps of flesh.

To make the case against foreign students, the latest mutation of the Brexit virus has taken different forms. One rhetorical strategy adopted by Brexiters is to try and undermine the credibility of UKHE by questioning the quality of education provided and suggesting ulterior motives. For years now we have heard about “Mickey Mouse degrees” that allegedly do not provide value for money. That is true only if ‘value’ is defined in the crudes way as graduate salary (if that!). From a Brexiter’s perspective, however, this strategy kills two birds with one stone: ‘Mickey Mouse degree’ refers not only to the quality of education provided, but often also to the substance of certain subject areas (everything with ‘critical’ in the title for instance or social sciences and humanities in general). So, attacking universities in that way hurts Brexiters’ two pet hates: immigrants and intellectuals.

The narrative that has become dominant, then, is this: Universities offer Mickey Mouse’ degrees of little value for no other reason than attracting students to make money at the expense of domestic students. The latter come here not so much to study, but rather as an easy way of entering the country, to which they will bring their whole family on a dependent visa. Once here, they occupy houses, seats on public transports, and slots at the local GP practice, and go on to steal our jobs.

The Sunday Times added a new line of attack a couple of weeks ago, by more directly victimising British nationals, (falsely) alleging that universities accept foreign students on lower grades than Brits have to achieve in order to make more money. Various university organisations replied immediately, the Russell Group of elite universities‘ response pointed out that the fundamental flaw of the article was that it did not distinguish foundation year courses from full degree courses. Foundation year courses are designed to help foreign students to catch up with their counterparts before joining a regular degree. Admitting students on lower grades is the very point of these programmes and does in no way limit availability of places for home students. Nor are these courses somehow a murky ‘back door’ – as the article in true conspiratory populist style suggests – that universities do not want the public to know about. They are of course openly and widely advertised.

Another fundamental omission in the Times’ piece, however, is that British university’s dependence on foreign students was a (Tory) government choice. After the Willets reform, which cut public funding to the sector by £3bn, relying on foreign PGT students has become the only way for universities to fund their activities. Importantly, the money foreign students pay is what allows UK universities to offer home students much lower fees. Rather than squeezing home students out of university places, overseas students’ subsidies them.

Contrary to the Brexiter world view of cruel competition for a pie of a fixed size and hence a problem of excessive demand, high demand and hence revenues made it possible to increase the pie by investing and increase supply to satisfy both domestic and international demand.

Shockingly, the Times piece led the Department for Education to announce an investigation into university recruitment practices. In other words, the government lets its policy decisions be dictated by a poorly researched and fundamentally flawed piece of ideological journalism in a Murdoch-owned newspaper.

This is not to deny problems and abuse of student visas. Some years ago, London Met temporarily lost its ability to sponsor student visas when the UK Border Agency found irregularities with the visa status of a quarter of London Met students. Also, a Panorama investigation found fraudulent activities around English language tests needed to extend student visas that were used to work in the UK illegally. Yet, since then rules have been toughened very considerably to tackle that problem. Universities have a legal obligation to keep close taps on their students, monitor their attendance, and have regular in persons meetings to confirm people on visas have not gone AWOL. The government has also introduced the so-called Prevent duty that forces universities to provide training to faculty to make them attentive to possibly problematic students in national security terms. Falling foul of these rules is an existential threat for universities, which is why – in my experience at several UK universities, albeit rather good ones – they take them very seriously.

Similarly, there may indeed be cases where students compete with the local population for scarce habitations and perhaps even GP appointments. Yet, the solution to that problem surely has got to be to finally sort the UK’s dire housing market – an ocean of failures to which foreign students contribute the tiniest of drops. Similarly, in all but exceptional circumstances, students – in their late teens early 20s for the vast majority – will hardly require a massive amount of medical treatment while in the UK. Indeed, they are part of an age group that health insurers typically see as good risks, precisely because they contribute without requiring services. Only in Brexit Britain can anyone seriously suggest that they are the cause of the massive problems the NHS is facing.

Ironically for the party that coined the term ‘anti-growth coalition,’ just like with immigrants, Brexiters are trying to convince the British people that the UK’s problem when it comes to housing, health services, jobs, etc. is one of excessive demand, rather than one of insufficient supply due to underinvestment. That narrative fuels the ‘othering’ which fans the flames of populism. In policy terms, it leads populist governments to look for solutions aimed at reducing demand, rather than fix the problems of underinvestment that lead to undersupply. That is not surprising, of course, given that those in power are the root cause of the problem. Indeed, what Britain is really suffering from is renteerism and corruption at the top, not parasitism at the bottom. Fixing this problem would require extensive reforms and redistributing the countries resources more evenly. If closed borders are to be part of the solution, then it should be closed borders for the super-rich and the non-doms to prevent them from expatriating the nation’s wealth and avoid paying taxes to the country that made them rich. Attacking foreign students is the latest strategy these people have found to deflect the public’s attention from who the real parasites are.

No plan

Back in 2016 – on June 21 to be precise – Hannan drew a rosy picture of what post-Brexit UKHE would look like: “Our universities are flourishing, taking the world’s brightest students and, where appropriate, charging accordingly. Their revenues, in consequence, are rising, while they continue to collaborate with research centres in Europe and around the world. The number of student visas granted each year is decided by MPs who, now that they no longer need to worry about unlimited EU migration,** can afford to take a long-term view.”***

In 2024, many universities are facing deficits – and some financial collapse. Indeed, the Willetts university funding system only works when there is a considerable inflow of foreign students. In a 2011 interview, David Willetts explicitly mentioned US universities’ ability to attract foreign students as one aspect UKHE should emulate. As such, the system is incompatible with the Tories’ obsession with cracking down on immigration. At the same time, the Tories’ other obsession with reducing public spending means that compensating universities for reduced fee income through increased public spending on higher education is not an option. Universities are caught in the middle of these obsessions.

Again, rather than working on developing a funding system that is compatible with both fiscal austerity and closed borders, the government’s answer is rationing and artificially reducing demand and access to higher education. Thus, the government’s response to the 2019 Augar review of university funding essentially consisted in rationing higher education by considering controls on student numbers through increased eligibility criteria for student loans. The latter idea, seems to have been abandoned for now after consultation. As far as I am aware, there is currently no plan for university funding. Whether or not universities will go out of business is – just like in the case of fisheries, farms, transport enterprises – not even an afterthought for the people in power. Rather than taking ‘a long-term view’, the PM focusses on short-term policies aimed solely at reducing net immigration numbers and thus save his own political future.

From a student perspective, if the government were controlling overseas student numbers merely by granting fewer visas each year – as Hannan suggests –, that would be a great improvement over the current situation. You may not get one of the visas, but if you did, you could plan your future and possibly benefit from very attractive conditions. What the government does instead is trying to control student numbers indirectly by making the UK unattractive, limiting, or removing dependent visas and post-study work opportunities. In the process, the government creates uncertainty, and the UK gets a reputation for constantly moving the goal posts and thus making it impossible to know what you will get once you graduate.

I’m writing these lines as I’m sitting on a plane back to Heathrow from Hyderabad (IND) where I attended an international studies fair. The contrast between the queues at US universities’ stalls and the empty chairs at the UK ones was shocking and depressing. A huge change from just a couple of years back when many Indians preferred to study in the UK – for cultural, historical, but often also family reasons (having aunts, uncles, and cousins in the UK). Brexiters will rejoice of course. Rather than invading our country, foreign students are now invading the US and Australia.

Trading blows

The attack on foreign students is all the more astonishing as it directly contradicts the avowed Brexiter strategy to trade more and trade with non-EU countries after Brexit. The vast majority of overseas students come from precisely those countries that the UK wants to establish stronger trade ties with, i.e. Commonwealth countries and countries in the Pacific region – India and China, but also Nigeria. As such, erecting de facto trade barriers for education service exports (by making it difficult or unattractive for foreign students to come here and consume those services) is another post-Brexit trade policy failure.

I have written about Brexiter trade fantasies extensively on this blog when it comes to trade in goods. I have not written so much about trade in services. A recent study by Rob Springford re-visits two apparent post-Brexit trade paradoxes, which consist of UK’s trade with EU and non-EU countries to move in parallel and the fact that UK service exports outperform all other G7 countries. I have written about the former in a previous post.

Regarding the second paradox – the UK’s service export outperforming that of other G7 countries – Springford notes that given that the UK’s economy is much more service dominated (or in other words deindustrialisation has been worse) than other G7 countries, given increasing demand for services, its service exports should have increased more than they did. So, once again it is about choosing ‘the right counterfactual,’ i.e. what should we compare the UK’s post-Brexit service trade performance with? The answer is not Germany, France, the G7, or Britain six years ago, but Britain today had Brexit not happened.

Doing that, Springford challenges the view that Brexit has not affected service trade. According to him, finance and transport services have been particularly hard hit. The reason for this is that these two sectors are strongly integrated inside the EU, which means higher barriers have been erected for third countries.

Education is not one of those highly integrated sectors. Non-EU universities are free to provide their services to EU citizens as much as they like. So, UKHE does not have to suffer from post-Brexit downturn in trade. Yet, the government’s immigration policies make sure that here too we impose economic sanctions on ourselves in the name of sovereignty and nationalism. As such, student visa policies are not unlike the new border control on food and fresh produce imports from the EU. Like the import controls, which will probably lead to shortages of certain goods, barriers for foreign students will lead to a shortage of customers for UK universities who crucially depend on them as a source of funding.

More generally, post-Brexit trade policy has not delivered what we were promised. Kemi Badenoch was at pains last week to explain why we still do not have a trade deal with the USA (she blamed it on Joe Biden). Targeting foreign students too has a negative effect on the government’s post-Brexit trade strategy. One of the key reasons why we still do not have a trade deal with India is that India insisted on more student visas for Indian nationals, which our government could not agree to. So far, the ‘Indo-Pacific Tilt’ has been hampered by North Atlantic isolationist fantasies.

Brexiter sadomasochism

Four years into real existing Brexit, Brexiters boosterism and bluster has mutated into a new form of Brexiter sadomasochism where Brexiters simply ask Brits to accept the pain in the name of freedom. Following the introduction of the new border checks last week, Jacob Rees-Mog on GB News lectured a farmer about the impact of Brexit on his business. Andrea Ledsome suggests the UK should grow its own flowers; and one FT reader commenting on an online article that suggested, bacon, avocados, carrots, and apple may be the first foodstuff to be in short supply by suggesting “Bacon is bad for you, avocados mainly come from LatAm and honestly if people can’t grow carrots and apples here.” (I am not 100% sure this comment was not meant sarcastically).

There is little hope that UKHE can expect any better. Indeed, it is unsurprising that Brexiters are relaxed about the impact of immigration rules on UKHE. After all, it is a sector full of ‘woke’ and ‘lefties.’ Plus, the more education people get, the less likely they are to watch GB News, vote Tory, or Reform UK. So, destroying UK universities may be killing two birds with one stone.

As 1,461 days later the Brexit virus’s latest mutation has infected UK higher education, it is to be hoped that the decreasing support of Brexitism in the British population will soon lead to some form of immunity.

 

 

*Some readers may be disturbed by me talking about higher education as an industry, as it may suggest I buy into the discourse of commercialisation of education where students become consumers and universities commercial enterprises. I certainly do not think that transformation of UKHE has been beneficial to the quality of teaching and learning in UK universities. However, I feel it is appropriate to adopt these terms here for two reasons: For one, it is largely a reality that UK universities are run – and have to be for reasons of policy choices – as quasi-commercial enterprises that seek to generate income from fees and research grants. As such, they have developed large marketing departments that help them follow market trends (not pedagogical or societal considerations) when designing programmes that are to be sold on the domestic and international markets. Again, that is not necessarily a good thing (although it has some advantages), but it is a reality. For the other, I purely focused on the economic side of UKHE, because I feel it is the only aspect Brexiters would accept matters. But of course, I would very strongly agree that destroying UK universities has far-reaching consequences for the country ‘s intellectual leadership, the advancement of arts, culture, and science in the UK and internationally.

 

** I’m not commenting on the fact that the trade-off that Hannan and other commentators suggest exists between letting in overseas students or other types of immigrants from other countries only exists due to the Tories’ obsession with net migration figures and due to their fear that our country cannot cope with current numbers of immigrants. Nothing is less certain than that assertion. Rather, giving an ageing population and labour shortages, the British economy seems to be craving an influx of workers with various skill levels. Only if the number of non-student immigrants did indeed impose a cap on foreign students, because there is an absolute number of immigrants above which the country cannot go, does the temporary increase in overseas students after 2016 constitute a ‘Brexit benefit‘ as the Spectator‘s Mary Mitchell seems to suggest

 

*** Hannan ‘s last sentence reveals either the usual ignorance or the bad faith so common among Brexiters: Deciding the number of student visas each year, precisely is not taking the long-term view. Universities – like any business – need certainty about future rules in order to plan investments and strategies. Changing student numbers every year makes that impossible creating very considerable risks.

 

Brexit Impact Tracker – 22 January 2024 – Above the Law

It has been a while since my last post, but it seems to me that recent events mean I can seamlessly pick up where I left off with my last blogs of 2023.

The past couple of weeks were of course all about the futile – indeed ‘stupid and disgusting’ – Rwanda Bill. This exercise in right-wing dog whistling has taken up way too much space in the media and the public sphere given that it will achieve absolutely nothing even if it were to work in the way the government envisages it to work.

Many a Tory MP was invited onto podcast, TV studios, and breakfast shows to give their take on the plan to deport immigrants to Rwanda. It is in this context that some of them let slip the mask and revealed what modern British conservatism has really come to. On the News Agents podcast, Simon Clarke, MP for Middlesbrough South and East Cleveland - stated matter-of-factly that ‘politics is about winning.’ Robert Jenrick, in turn, – referring to himself and his fellow MPs – confidently declared in an interview that ‘the law is our servant, not our master.’ The two statements provide a very good explanation of everything that has gone wrong in our country since Brexit: Politicians are after victories – not the common good – and the law is means to achieve that goal not a self-limiting force that applies to any citizens in the country, whether legislator or not. Rather than about serving the people, promoting the common good, and solving the countries problems, governing has exclusively become about winning the next election to maintain one’s personal power. It is the ‘politics is about winning’ attitude that explains why the British media talks a great deal more about the plan to deport a few dozen immigrants to a faraway country than about the real issues (health or care system; education; environment; national security etc). The Tory’s only hope to cling on to power – other than with the help of new electoral boundaries – is to generate enough fear and anger amongst those who can be convinced that immigration is our biggest problem to make them choose a Tory MP in spite of what the party has done to the country in its 13 years in power.

Lord Carlile rightly saw the passing of the Rwanda Bill in the Commons as a sign of the government putting itself above the law – essentially legislating a country to be considered safe that was deemed unsafe by the Supreme Court (Although I would disagree with Lord Carlile that this can be seen as a step towards totalitarianism. In one of my last posts I argued that we should not hesitate to call out fascists tendencies in British politics. Yet equally we should avoid engaging in hyperbole and between fascism and totalitarianism there is still a huge difference).

The Rwanda bill has been in the spotlight for some time now, which may seem surprising given that it evidently is a purely symbolic policy that – at best will remove a few dozen immigrants from the country. But Tory in-fighting about a meaningless policy keeps the media busy, the audience entertained, and the Tory voter’s anger focused for a while. Yet, there is no denying that with every passing day the government’s policies and claims are moving further away from the promises that were made and from people’s reality. Sunak’s insistence that his plan (to stop the boats) is working sounds incredibly shallow given that it essentially consists in a crude – and silly – deterrence strategy that banks on the deterrence effect of sending a few dozen arrivals a year to Rwanda and interning another few dozen in horrible conditions on a boat.

Here, like in other areas, Brexiters’ denial of reality will ultimately be crushed under the unbearable weight of empirical evidence belying their arguments. The past few months provide some indication that that weight is increasingly being felt not just by ‘Remainers’ but also by ‘Leavers’ – this seems to herald in a new phase of Brexit. The question, however, is what will this new phase look like?

Brexiters admitting failure - have we won?

It feels indeed like we have entered a new phase of Brexit. Following the publication of a new set of record net immigration figures before Christmas, the Telegraph’s Jeremy Warner penned an article unequivocally describing Brexit as a failure not just in economic terms – which his piece very tellingly almost takes for granted – but now also in terms of immigration. Similarly, the Spectator ran an article – arguably written by a Remainer – that did not debate whether or not Brexit has failed on its own terms and on Remain’s terms, but rather on the impact of is failure on various factions of the pro-Brexit public. Of course, these are just two examples, but the fact that they were published in the notoriously pro-Brexit biased Telegraph and Spectator respectively is telling.

So, have we – Remainers – won the argument? Far from it. Rather than Brexit being a swing of the pendulum to the extremes, that would be followed by a swing back and ultimately a settling in the middle, Brexit is better captured by the analogy of a slippery slope rather than a pendulum, which has at its end an abyss. Or – to use another analogy – nearly a year ago, after the signing of the Windsor Framework, Chris Grey – arguably one of Britain’s foremost Brexit experts – asked on his blog whether the Brexit fever had broken and cautiously suggested that we may be on the verge of a return to a healthier state that would make a start of a slow recovery possible. That was a reasonable and widely-shared assumption amongst many – including by some Brexiters who used Brexit simply to ‘stick it to the elite.’ However, it is becoming increasingly clear that analogies or metaphors referring to a temporary departure from the centre ground, from moderation, from normality may not just be misplaced, but also dangerous in the sense that they may be leading us to complacency about the radicalisation of the right in our country.

The reversion to the mean myth: A dangerous complacency

The bursting of the Brexit bubble – in the sense that even Brexiters are now admitting its failure – may be greeted by many with joy. Finally, what we have been saying is being accepted by some of the most vocal supporters of Brexit. Finally, British politics will undergo its ‘reversion to the mean’ and reason will return triumphantly. Matthew D’Ancona sees the damage the Tory party is inflicting on the country and on itself with the appalling Rwanda plan as the twilight of the ‘pound shop Enoch Powells’ and predicts that ‘[t]heir era is coming to an end’ even though ‘the harm they have caused will take many years to repair.’

I doubt that is indeed the case. Even electoral oblivion in the next General Election will not put the NationalConservative (NatCon) genie back in the bottle. One of the reasons for this is the wide-spread complacency of Brits regarding the stability of our democracy and our institutions. A shocking example of that complacency comes from the FT’s Janan Ganesh who a few months ago called Britain ‘Europe’s haven from the hard right.’ His evidence for the claim that the Tories are not comparable to continental far-right parties is threefold: 1. Tories were not anti-Vaxx, anti-Lockdown, and they are not climate change deniers. 2. After the invasion of Ukraine, they were not pro-Russian, but amongst the most resolute supporters of Ukraine; 3. they have appointed to important offices of the state people from non-white descent.

The last one of these claims is particularly ludicrous. So, let’s deal with that one first. Using the ethnicity of some members of government – including the PM – as evidence that the Tories are not ‘hard right’ only holds if we define hard right as the crudest sort of white supremacism. It seems to rely on the idea that ‘brown people cannot be racist,’ which is obviously nonsense, as Hardeep Matharu has explained in an interesting video concerning Priti Patel. But even without the complex colonial history of hierarchies of ‘races,’ appointing black people and people of colour to important positions does not constitute proof that the Tories are not hard right.

Regarding the other pieces of evidence, on climate change, the government has since reverted course on its Net Zero goals, bringing the party more in line with climate change deniers – although the reversal was framed in pragmatic terms – which according to Ganesh seems incompatible with the label hard right (despite the constant reference of right-wing populists to ‘common sense’).

On anti-vaxx, lockdowns and Russia, there is myriad of reasons why the Tories may not have adopted what Ganesh seems to associate with typical hard right positions. For one, any political party – however extreme – tends to tune down its policies somewhat upon entering government and facing the realities of what is politically feasible and desirable. Giorgia Meloni’s government in Italy illustrates that. In addition, the Tory government of Boris Johnson may have had extra incentives to display a tough stance on Russia, given how closely intertwined the Tory party and Johnson himself has been with Russian money and oligarchs.

Conversely, Ganesh ignores the obvious signs that the Tories have indeed become a far-right party. Chief amongst those signs are: cabinet ministers attending NatCon conferences, Rishi Sunak attending a far-right post-fascist meeting in Italy, and the continuing undermining of democracy and the rule of law by Tory governments which I wrote about many times before. In this context, Cameron’s decision in 2009 to leave the centrist EEP group in the European Parliament and set up the Alliance of Conservatives for Reformist in Europe, which was joined by post-fascist far-right parties like Brothers of Italy, illustrates that rather than being a haven from the far-right, the UK has built a haven for the far-right.

Ganesh also reaches the erroneous conclusion that it is thanks to the first-past-the-post (FPTP) electoral system that the UK is allegedly protected from far-right political forces. How false that idea is can be illustrated by a simple comparison of the recent polish election where the far-right PiS party got 35.4% of the popular vote in a proportional system and lost power, while the fateful 2015 UK General Election returned a Tory majority government (330 of the 650 seats) when Cameron’s conservatives just obtained 36.9% of the popular vote. The UK’s FPTP system is excellent at amplifying the power of a minority – if that minority is far-right, like it has been at least since 2016, there are no checks and balances protecting the majority of people in the country from the tyranny of the minority.

The delusional article by Ganesh – published in the UK’s most serious newspaper – shows just how far the normalisation of the hard right – that political scientist Cas Mudde talks about – has gone in this country.

Political Brexit v. Technical Brexit

That is not to say that the above-mentioned thesis of a return to moderation is entirely false when looking at Brexit narrowly defined as the policies implemented to manage the UK’s departure from the EU. Here, active divergence from EU rules and regulations remains rather limited (mostly to the area of environmental regulation) although passive divergence is happening. In various respects, successive Brexiter governments have shied away from walking the talk of ‘sovereignty,’ ‘taking back control,’ etc. Rather than imposing a radical reform programme delivering ‘Singapore on Thames,’ Brexiters have been kicking the most tricky cans down the road (e.g. border controls – now set to enter into force at the end of the month), while delivering only on the most ridiculous and futile forms of taking back control (as in blue passports and pint bottles of champagne).  So, in that respect, the Brexiter zeal has indeed been considerably dampened in particular on the big issues like the UKCA quality mark and Northern Ireland. But that does not mean that the Brexit battle has been won. In fact, increasingly the greatest danger with Brexit is not the exit from the EU per se, although that remains an economically hugely damaging problem, but the political dynamics it has unleashed, i.e. political Brexit, as opposed to technical Brexit.

In this blog I have consistently considered Brexit not as an end in itself and not even as a means to achieve a specific set of societal, political, and economic policy goals preferred by Brexiters. Rather, I have focused on Brexit as a means to achieve above all one specific goal, namely, to conquer, maintain, and increase the power of a part of the right-wing elite, which previously only held subaltern positions of power in the British polity. Farage and Rees-Mogg – two average financiers – Boris Johnson – a failed journalist –, Suella Braverman – a mediocre lawyer – and Rishi Sunak – a billionaire in search of an identity-creating hobby – all used Brexit not to genuinely change our country for the better, but purely for personal ambition. The crassest example of upwards political mobility on the back of Brexit, however, is David Frost whose new-gained fame and notoriety far outstrip either his intellect or his capabilities as a politician, as he illustrates time and again when he blesses us with a new Telegraph piece on his political theories. That’s what I have called Egocracy.

Ironically then, – given the populist narratives driving it – with Brexit, British politics have finally completely stopped being about the public good and become purely about the elite’s self-interest. That’s what Simon Clarke’s statement about winning is capturing so neatly: It’s not about the common good or making this country a better place for everyone – or even for the majority; it’s about winning in a game played by a group rich, privileged, elite-educated people who can afford not to care about our public services, pensions, housing- and labour markets. The contempt with which the civil service is treated and the nonchalance with which the deliver of public services to the people of this country are approached in face of massive problems can only be explained in this way. The people currently running the country can afford not care about these things.

The new phase of Brexit is hence a crucial not just for Remainers, but also for anyone else who actually cares about this country and its people – and that includes Leavers, many of whom I’m sure voted to leave the EU with the public good in mind, i.e. because they genuinely bought the argument that EU membership was to blame for our ills.

We need to get ready for a new public debate where the dispute is not so much whether or not Brexit has failed – although no doubt some of this will linger on -, but about who is to blame for its failure. To some extent, this is a more dangerous phase than anything we have seen after the 2016 Referendum. While many Remainers had no doubt that Brexit will be a disaster – at least given the obviously incompetent and unserious group of people in charge of delivering it –, for Leavers the first years post-Jun 2016 was a phase of hope. They had gotten what they wanted and could hope for the spoils of their victory to be distributed. None of this has happened – everyone – Remainer or Leaver – has lost and continues to face a decade-long decline in living standards

Needless to say, that such a situation will do nothing to alleviate the frustrations and grievances that led people to vote leave. If anything, people feel more betrayed and powerless. Their anger is now searching for new targets. Rather than a return to reason, an acknowledgement of the architects of Brexit that their project has failed, we are entering a phase of scapegoating, where those who cannot own up to the ugly truth of Brexit will continue to use it as a means to promote their careers and interests.

The next phase of Brexit: Scapegoating

An obvious scapegoat are immigrants, refugees and asylum seekers. Warner’s piece leaves no doubt about the popular sentiment in the country and the reason why immigration should be on top of the Brexit deliverables. According to him, “migration has become more of an economic cost than a benefit.” That seems to be his opinion rather than an evidence-based statement of fact. Warner further claims that ‘[e]conomies grow in two ways – either through population growth or productivity gain. It is only the latter form of growth that advances living standards.’ Hence, only ‘[i]f population growth through migration leads naturally to productivity gain, then there would still be an economic case to be made for it, but sadly this no longer seems to be true.’

Even if we were to accept that questionable statement (population growth in itself can drive economic growth, which may increase the living standards at least of a part of the population), blaming immigrants for low productivity growth is utterly dishonest. Two of the main reasons why Britain has been struggling with productivity growth are low levels of business investment and labour shortages and lack of skills. That lack of investment is in turn primarily the result of the type of economic system that has emerged in the UK since the 1970s at the latest. That is to say, a system where shareholders are given a great deal of power and influence over the decision companies make. Such a shareholder-orientated form of capitalism leads to a situation where a large proportion of corporate profits are ‘returned’ to shareholders, rather than being reinvested in the company. Therefore, shareholder pressures are a much more likely explanation of a lack of investment in productivity enhancing technologies than immigrants. Indeed, given the second factor – labour and skill shortages – immigration seems like part of the solution rather than part of the problem.

To the extent that immigration does aggravate the problem – by providing an abundant and relatively cheap workforce at the lower end of the skills pyramid, which reduces incentives to invest to increase productivity – this is only possible due to political choices. Indeed, if the British government wanted to benefit from foreign workers to fill gaps in the domestic labour markets, while still incentivising companies to enhance labour productivity rather than relying on cheap labour, there are a myriad of policy tools at its disposal, such as increasing minimum wages. So, rather than reducing immigration – and thus worsening labour market shortages – the government could increase labour protection and workers’ rights to tackle the productivity issue.

These issues of economic policy and corporate governance are ignored by Warner and most of his right-wing Brexiter colleagues. The goal is obvious: Encourage people to punch down, so that they do not get any ideas about punching up.

Worse still, due without doubt to the constant mantra-like repetition of the claim that ‘[i]mmigration is perhaps the biggest political issue of our time,’ even more moderate and centrist people start accepting the claim as a fact. Thus, on the News Agent podcast, Jon Sopel recently stated that he strongly agrees with the narrative that people in this country strongly care about illegal immigration and notably bout the small boats. Is that true? Evidence-based analyses, like the ones summarised by Prof Rob Ford in a twitter thread, show that despite record high levels, ‘[o]pposition to immigration is *lower*, immigration is *less salient* and concern about it is now more concentrated in particular political and social groups.’ In other words, it is an issue that Tory voters care deeply about, but the majority of the country does not and if anything, have positive opinions about immigration.

This is remarkable given the persistent ‘priming’ of the people who are being surveyed. Anyone who follows the news in print, on the radio, or on TV will have been exposed to reporting about immigration, asylum, and refugees day in day out. Due to the Tory obsession with it, the topic is omnipresent and very senior public figures – such as the former Home Secretary Braverman and former Migration Minister Jenrick – have fallen prey to what Chris Grey calls a ‘small boat psychosis,’ discussing the topic in dramatic terms in the media (‘invasion,’ ‘untold damage to our country’).

Despite all that, there is very little evidence that the country as a whole has fallen prey to the Tory small boat psychosis. Therefore, Sopel elevating the issue to one that voters in general care strongly about is both irresponsible and succumbing to the far-right narrative. Similarly, at the end of an interview with Tory MP Charles Walker Sopel considered the Tory MP to hold ‘sensible views’ – despite the fact that he explicitly reiterated the absurd post-truth claim that Rwanda is a safe country for refugees (“I believe Rwanda is safe”). It is when moderates and centrists stop calling out falsehoods and start accepting the absurd narratives from the populist, post-truth right that the boundaries of reasons are dangerously shifting.

Labour too is guilty of validating the Tory narrative by not showing the courage to call bullsh*t on its policies. Thus shadow Home Secretary Yvett Cooper was to fearful of what people may think to commit to dumping the obviously absurd and ineffectual Rwanda Plan. While it is understandable that Labour tread carefully not just on immigration – but also Brexit (see Chris Grey’s insightful post), moderation on calling out untruths means that labour consolidate post-truth Brexit Britain rather than starting to move us back to the realm of reason.

Whatever the majority in the country thinks, however, given Brexit’s abject failure on all fronts including ‘taking back control’ of our borders, it comes as no surprise that Brexiters feel betrayed and frustrated. Rather than leading to regret and insight, this seems to push them to further radicalisation. Thus, Warner bemoans that supposedly higher-skilled European immigrants have been replaced by people from the middle east and from Africa who allegedly not only have lower skills, but also are more difficult to integrate – presumably due to their more remote cultural values? So, the politically correct argument about ending free movement of people (because it was discriminatory against people from further afield than the EU) has given way to a more racialised view of extra-EU immigration. So, rather than by a ‘reversion to the mean,’ Brexit’s failure is followed by a sense of ‘abject betrayal,’ which pushes the political landscape further to the far-right. Openly rejecting human rights, and openly linking the right to marry and live in the country to one’s income – as James Cleverley’s new measures increasing the threshold for dependents does – are signs of a further radicalisation of the nationalist right.

Sociologist René Girard tells us scapegoating usually leads to what he calls cycles of ‘mimetic violence,’ whereby a society regenerates itself by transforming internal tensions into violence against a scapegoat – historically often minorities. The question for Britain in 2024, who will that violence – symbolic or otherwise – be directed against and how far will it go? There is still hope that ultimately the Rule of Law may be strong enough in Britain to survive until the next General Election. But given the direction of travel, Brexit may soon seem like a very moderate project compared to what its evident and increasingly widely accepted failure will give rise to.

Who’s out of touch? The real ‘real people’ and working-class plurality

In lieu of my regular Brexit Impact Tracker, below (with permission) is a version of an article that was recently published in the Byline Times Supplement under the title “The Conservative Party's Patronising Play for the Votes of 'Real' Working Class People.”

This is a rather personal post, which seems fitting given that my dear mother passed away this week. Here is to her and all other working-class people who are full of love, decency, and respect for other human beings - wherever they are from - however hard and unfair their own life is!

I’m not entirely sure at this stage when I will post my next regular blog. Just in case though: thanks to all my readers for following this blog over the past year!

Who’s out of touch? The real ‘real people’ and working-class plurality

Being ‘out of touch’ has become a universal insult in British politics in recent years. Out of touch, that is, with the ‘real people’ in our country, which apparently would mean working class people from outside the large urban centres and university towns and active in manual, blue-collar rather than white-collar jobs. The latest public spat about being ‘out of touch’ was sparked off by Prime Minister Sunak being filmed using a hammer sideways. This prompted the Labour Party to post a video excerpt with the caption ‘not the son of a toolmaker’ in reference to Keir Starmer – omitting, however, that the clip also made it clear that the PM had been instructed to use the hammer that way.

The episode reminds one of Monty Python’s ‘Four Yorkshiremen’ sketch where four evidently wealthy men are outdoing one another telling stories of just how deprived their origins were. It would seem that in British politics, only those who had to drink a cup of ‘sulphuric acid’ – instead of tea – for breakfast and ‘work twenty-nine hours a day’ (Eric Idle’s words) can truly claim to speak for the ‘real people.’ Everyone else is ‘out of touch.’

That is where Lee Anderson comes in for the Conservative Party. Its Deputy Chairman lays claim to be true salt of the earth working class; having a coal miner as a dad and having worked in a coal mine for ten years himself. That background seemingly confers upon him a ‘connectedness’ with the spirit of British people that almost magically transforms his every opinion into what the ‘real people’ in this country actually think and want – most recently that the British government should break the law to deport people to Rwanda despite a Supreme Court judgement ruling that plan unlawful.

The paradox with Anderson being portrayed as the unchallengeable spokesperson of the working class is that his views say a lot more about what politicians who ‘are out of touch’ think working-class people are like, rather than what they really are like. As such, using Lee Anderson as the representative of the ‘real Britain’ and spokesperson of the working class is the ultimate Tory insult of working-class people.

Having grown up in a working-class family – my father a factory worker, my mother a housewife – most of my relatives, our family friends, and acquaintances are working-class people. Some of these people are like Anderson. But most are not. Amongst our factory worker friends were people who spend their valuable spare time caring for refugee families, for people with addictions, or launching environmental associations. Most of them care deeply about social issues and hold very humane and tolerant opinions. Not radical but rather conservative ones – especially by 21st century standards –, but humane and tolerant, nevertheless.

To be sure, sometimes – during a family gathering or a meet up of our local brass band – you would hear someone make crass comments that could be shocking. But again, while these were usually the loudest, they were certainly not the most representative voices. Indeed, far from being the opinions of a ‘silent majority’ that dares not speak its mind, the crass reactionary opinions were those of a small, but very vocal minority.

Catering towards this angry, shouting minority – from all parts of society – has led to what I have called elsewhere a strange inversion of ‘virtue’ and ‘sin.’ What used to be considered democratic virtues and the basis of our liberal democracy are now becoming ‘luxury beliefs’ that only privileged people in good jobs and living in metropolitan areas can afford to hold. Conversely, disregard for any rules of morality, self-restraint, and human decency – that are so crucial to peaceful societies – has come to be seen as an expression of freedom; freedom defined as a ‘right to transgression’ of social norms and values – however harmful that transgression is to others.

This inversion of values goes together with an anti-intellectual, obscurantist ideology that attributes the ‘real people’ an alleged preference for ‘common sense’ over expertise; gut feeling over reason; and personal opinion over society’s norms.

This right-wing trope is the most insulting caricature of the working classes who have fought for centuries to have access to education and send their children to school and university for them to have a decent future. Many working-class people have struggled hard in their lives to get a decent education despite the cards being heavily stacked against them. Many working-class people highly value education, reason, and science. Associating working class values with obscurantism and anti-intellectualism betrays how little the voices of purportedly ‘real people’ like Anderson, or academic and columnist Professor Matt Goodwin, or so many others, really know and care about them. They do not represent and speak for the ‘real people,’ they create the myth of a working class supposedly holding a cohesive set of reactionary values; to fit those of the Eton- and Oxford-educated right-wing elite and billionaire party donors and media owners.

It may seem paradoxical that some of the most privileged people in the country are the ones pretending to speak in the name of working-class people, given their otherwise patent contempt for those very same people. Besides being a tool for individual career advancement, a key reason for this is that after the financial crisis of 2008 and a decade of austerity, their hateful populist rhetoric is crucial to encourage people – who have seen their living standards and prospects decline – to punch down rather than getting any ideas about punching up. In other words, make people hate Islington, so that they do not start hating Mayfair.

This also explains why right-wing ‘thinkers’ like Matt Goodwin have developed a (very incoherent) ‘New Elite Theory’ that does all it can to eliminate socio-economic differences from the equation and instead define class based on reactionary right-wing beliefs rather than profession or socio-economic status. We are told that the real people are revolting against highly educated, wealthy, urban elites because of their liberal ‘luxury’ values, while they were quite happy to be dominated by an equally highly educated, even wealthier, not less urban, ‘old elite,’ with whom they allegedly shared conservative values. In Goodwin’s New Elite Theory, anyone who is opposed to immigration, who proclaims to be ‘patriotic’ and ‘nationalistic’ is part of the real people, while anyone who disagrees with such views is ‘out of touch.’

Despite the obvious discrepancy between what ‘real people’ think and what far-right politicians want us to believe they think, there is a real danger in this political strategy. The danger with Anderson as the Tories’ working-class poster-boy is that he may become a self-fulfilling prophecy: Reinforcing, enabling, and encouraging the nasty far-right fringe of the working (and other) classes. Indeed, it does seem to me that amongst my working-class acquaintances extreme voices have become louder – sometimes drowning out those who do not share their views. That is the result not so much of populist parties having given real people a voice – as the far-right GB News channel claims to do in the UK – and them finally dare saying things they have been thinking all along. Rather, it is because members of the elite, like Nigel Farage, Jacob Rees-Mogg, Richard Tice, Suella Braverman, Boris Johnson, who have made a career based on a divisive rhetoric, enable the most extreme voices from every social class – including the working-class – to become more confident.

Ultimately, ‘real people’ may start believing reactionary arguments given their omnipresence in the media and public discourse. Thus, a lot of people tend to perceive immigration as a problem for their country, but not in their everyday life. This suggests that rather than actually experiencing any issues with immigration or immigrants, people simply start believing that immigration is a problem because they are told so. People may become convinced that immigrants are the ones putting strain on public services – not fiscal austerity and underfunding by our very own UK governments – so that the elite-generated discourse becomes a wide-spread belief.

What will it take to get politicians out of the pernicious belief that what will get working-class people to vote for them is hatred and resentment? First and foremost, it would need more working-class people standing up and challenging the idea that they are like Lee Anderson: crude, cruel, and contrarian. Rather than accepting that stigma, working-class people in all their plurality, with all their variety of ideas, values, and convictions would need to participate more in the political debate rather than being represented by political entrepreneurs who are given a platform by far-right billionaires.

What stands in the way of that is often the stigma that comes with being a member of that class. As one study of ‘class in the 21st Century’ found, working-class people themselves often distance themselves from that term, associating it with people who are not in work. Working-class people need to fight against that stigma, the weight of which can be felt even among those who have experienced ‘upward’ social mobility.

Real working-class people reclaiming their identity would force more honesty onto the political elite and would open spaces for electoral strategies that do not rely on mobilising extreme fringes of the political spectrum, but on actually representing the plurality of views that exist in modern British society. The ‘First-Past-the-Post’ voting system constitutes a major obstacle to this outcome, as does a media system dominated by billionaire-sponsored newspapers and outlets. Neither of these factors are likely to radically change anytime soon. Until that change happens and allows a larger plurality of voices to be heard inside Westminster and outside, we are all at least in part out of touch with what ‘the real people’ in this country really think and want.

Brexit Impact Tracker – 24.11.2023 – Blackshirts Brexit: Are we one General Election away from fascism?

What an incredible fortnight (and a half) it has been in British politics – even by post 2016 Referendum standards! We have seen a Home Secretary openly defying the Prime Minister over an article she published in a national newspaper, undermining the London Metropolitan Police by suggesting favouritism and bias in policing of right-wing and left-wing demonstrations, and inciting a far-right mob to descend into the streets of London by wrongly suggesting a pro-Palestine demonstration may disrupt the Remembrance Day celebrations in central London; causing disruption and violence by far-right demonstrators instead.

The other extraordinary event was not so much the UK Supreme Court ruling that the Rwanda asylum plan is unlawful – which was a rather likely outcome –, but rather the UK Prime Minister’s (PM) defiant reaction to a ruling of the country’s highest court.

I think it is no exaggeration to state that over the past three weeks, the country has taken another step – actually two – towards fascism. I know many readers will recoil at the suggestion of any comparison of post-Brexit British politics with fascism, but bear with me...

Fascism beyond insult

I generally agree with the historian Robert Saunders’s astute warning “that we should be careful not to cheapen the term [fascism], out of respect to the millions who died under immeasurably worse political movements than [the Brexit Party, Boris Johnson, Brexit and the Right more generally].” That is undoubtedly true. However, there is a very real sense in which the words and deeds of the current governments and some factions in the Tory party have almost become textbook examples of fascist ideas and actions.

Mathew Feldman summarises the so-called ‘new consensus’ definition of fascism as a revolutionary nationalism characterised by a lowest common denominator, namely ‘fascism’s quasi-religious belief in a reborn community, refashioning itself through a revolution that was as much social and cultural as it was martial and revolutionary.’ (my emphasis)

Like Saunders, Feldman cautions against facile application of the label to today’s radical right groups, because ‘even if radical right groups today are most closely associated with the fascism of the past, most operate – and formally accept – the reformist context of liberal democratic hegemony. Even the worst offenders […] have not (yet) shed the framework of inalienable rights, the separation of powers, and primacy of the electorate that remains the hallmark of liberalism.’ (my emphasis)

Readers may agree that – in addition to the now customary references to the Brexit revolution and a British renewal –, the past fortnight’s events provide ample evidence that two of the three hallmarks of liberalism on Feldman list have been seriously threatened. And this time they have been threatened not by a fringe movement marching through the streets of East London, but by the people in government or close to the governing party. Braverman’s actions and the government’s response to the Rwanda ruling have indeed led to calls to undermine both our inalienable rights and the separation of powers.

The arsonist Home Secretary and the Black(T-)shirts

In her Times article, Braverman accused the Met Police Force of “playing favourites” by cracking down on right-wing protesters harder than on left-wing ones, in particular when it came to pro-Palestinian protesters in London, which she called “hate marchers.” That behaviour got her the sack. But the damage was done.

Braverman’s words encouraged far-right activists – like Tommy Robinson – to turn their islamophobia into opposition to antisemitism (despite often having attended not just Islamophobic but also antisemitic rallies). The result was hundreds of right-wing thugs (many dressed in black jackets and T-shirts) descending on central London and engaging in fighting with the police in their attempt to reach the Cenotaph where the Remembrance day celebrations took place. Robinson – like others clearly egged-on by Braverman’s comments - explicitly stated that "British men are mobilising for Saturday to be in London […] show our Government and show our police and show Hamas and everyone sitting around the world saying ‘Britain has fallen’ that there is a resistance."

Braverman once again excelled in her – quite literal! – role as arsonist in chief, stoking the flames of racism, xenophobia, and hatred, all in the name of a revolutionary nationalism that pretends to be saying and doing what people really think and want.

It is worth noting that the right-wing thugs fighting the policy and disrupting the Remembrance service hardly speak for the British people. An Ipsos Mori poll shows that Brits are primarily concerned for Palestinian (74%) and Israeli (71%) civilians, think the UK government should be a neutral mediator (37%), and blame Hamas (not Palestinians) for the conflict (32%) but almost as many (29%) say they don’t know. These figures starkly contrast with the heated political debate where extremists on both sides suggest there is only one acceptable position to adopt – either condemning Hamas and with it all Palestinians as terrorists or condemning the Netanyahu government and with it all Israelis – as quasi-fascist colonialists.

Regardless, the episode constitutes another shift to the right of the British political landscape. The Home Secretary and leader of one of the most influential factions in the Tory party has adopted inflammatory language that is barely distinguishable from that the right-wing thugs rioting in central London use. She is actively encouraging fascist groups to challenge our police and threatening fellow citizens exercising their right to demonstrate. Braverman is trying to ride the wave of the ‘Brexit Revolution,’ that put her faction in control of the Tory party, all the way to the top – in the process she is increasingly turning the Brexit project into ‘Blackshirts Brexit.’

While Braverman easily could be put into the ‘fruit cakes, loonies, and closet racists’ category of far-right extremists, the PM – despite firing her and despite seemingly moving to the centre by appointing the originator of that phrase, former PM David ‘Let’s-have-a-referendum’ Cameron, as Foreign Secretary – was not less radical in his reaction to the Rwanda ruling.

Refoulement or replacement?

The idea behind the so-called ‘Rwanda plan’ – a Memorandum of Understanding (MoU) signed by Priti Patel in April 2022 – is very simple: Sending asylum seekers wo arrive in the UK illegally – e.g., on small boats – directly to Rwanda for processing of their asylum claims by Rwandan authorities, rather than processing them in the UK by UK authorities. The reason for its unlawfulness is equally simple: There is evidence that Rwanda does not respect the non-refoulment right of asylum seekers, and may hence send back applicants to their home countries where they may face prosecution, torture, and death. As a result, the Supreme Court unanimously ruled that Rwanda cannot be considered a safe third country. Sending asylum seekers there for processing would breach the UK’s obligations under domestic and international law.

Sunak’s response to the Supreme Court ruling was primarily aimed at appeasing the NatCon faction in the Tory party especially following his sacking of their ring-leader Braverman. It was defiant, petulant, and radical: Instead of accepting the ruling, Sunak promised to make the unlawful plan lawful by simply introducing emergency legislation declaring Rwanda a safe third country.

That may not sound spectacular, but it is. It means the UK government engaging 100% in post-truth politics. Suggesting that the UK Parliament can simply declare Rwanda to be a safe country for asylum seekers either suggests that the evidence provided by the UN High Commissioner for Human Rights of major flaws in Rwanda’s asylum system (e.g. 100% rejection rates for asylum seekers from Afghanistan, Syria, and Yemen) is wrong, or that the fact that asylum seekers may face refoulment – and hence – torture and death is acceptable to the British government. Suggesting the former is post-truth – suggesting the latter is compatible with fascist disregard for human rights. Both are a direct challenge to centuries of liberal thinking about the separation of powers. A PM suggesting that the parliament he controls should adopt legislation with the sole purpose of defying a court ruling is just extraordinary.

And he was not alone. Tabloid newspapers are calling judges enemies of the people, MPs support suggestions to essentially abolish the separation of powers, and the UK’s governing party’s deputy chairman openly argues the law should be broken. All these may hardly raise any eyebrows in post-Brexit Britain, but a few decades ago, most people probably would have been shocked by a high-level politician of a major Western power to call on his government to break the law and abolish the separation of powers. We are in the process of normalising such acts and deeds and are thus taking hammer and chisel to two of the pilers of liberal democracy in our country: inalienable rights and the separation of powers.

The attack on the fundamental right of non-refoulment is now spreading. The Sunday Times published a piece in which Matthew Syed confidently states that migration from the Global South to Western countries is consciously orchestrated by authoritarian regimes like China, Russia, Iran, and North Korea to destabilise the West. As a result, Syed concludes, we need to reject the allegedly anachronistic non-refoulment principle to disincentivise people to try and reach Western countries illegally. The non-refoulement principle seems to be in line to become the next concept on which Brexiters may project their anger. Syed argues that ‘all the unintended consequences associated with the refugee system can be traced back to the principle of non-refoulement.’

Syed makes some valid points – e.g., calling out Western hypocrisy about asylum politicises and pointing at the contextual differences in the immediate post-war context and current population sizes – and explicitly insists the rule of law should be respected and finding it ‘shameful that Rishi Sunak was unable to condemn the horrendous Lee Anderson for suggesting’ law should be broken, and the Supreme Court ruling ignored. (Indeed, under pressure from the NatCon fringe of his party, rather than condemning Anderson’s remarks, Sunak seems to be making them his own suggesting that Human Rights laws should be disapplied.) Even Syed’s more extreme point that migration is used as a weapon against the West is not entirely without foundation given recent examples from Russia and Turkey’s behaviour in the past.

But – and this is a massive but – anyone writing about asylum, immigration, and fundamental rights will need to be careful about making to sweeping and unnuanced statements that cross the line into conspiracy theory territory like, as Dave Vetter points out, the far-right Great Replacement theory, which has served as justification for racial violence.

Syed’s suggestion that law should be changed in a way to make refoulement possible, suggests a purely procedural, but not substantive, definition of the Rule of Law. It implies in practice that the fundamental reason why we have that rule – which in fact is key to provide any protection from prosecution worthy of its name – have become up for debate. A Telegraph columnist went as far as advocating ‘a bonfire of human rights laws,’ although that headline now seems to have been changed (it’s still in the web address though). That constitutes a fundamental attack on the liberal rules-based international system. The fact that the attack comes alongside procedural reassurances that the Rule of Law should be respected, may actually make the substantive point (that human rights are expendable) more dangerous still, obfuscating just how radical the views professed are.

Still, there is still a layer of civilising force of hypocrisy covering the government’s and right-wing commentators’ nastiness, which makes them stop short of spelling out the implication of the emergency legislation. It is that layer of hypocrisy that separates us from outright fascist rhetoric where the government would openly admit that asylum seekers’ lives are expendable. But as the UK Prime Minister moves into territory worthy of right-wing thugs – as Chris Gray astutely observed this week (“there is now effectively no difference between the kind of things the Brexitist populists say and those that the far-right ‘counter-protestors’ at the Cenotaph say”), the boundaries of what is acceptable are pushed further and further to the right. To but it brutally bluntly: The step from accepting to deport people you do not want in your country to a place where they may face death, to wishing that they face death may not be that huge.

The shape of things to come

What the past fortnight has shown above anything else is that truth does not matter anymore in British politics. Thus, Braverman’s claims that the police is tougher on right-wing demonstrators than leftwing ones, fly in the face of what has happened – say – to Republican protestors during the coronation or people attending the Sarah Everard vigils. Similarly, the Supreme Court’s decision has been presented by leading politicians as if it were the decision of the European Court of Human Rights (ECHR). That is shocking when a sitting MP – like Andreas Jenkyns – does it; it is even more shocking coming from the PM. The truth is, of course, that the Rwanda decision was one taken by a UK court based on its interpretation of English and international laws. But again, it is not about truth anymore. Truth does not matter in post-Brexit Britain and there is no point arguing about facts. Facts are not challenged by providing evidence to the contrary. Rather – just like the government is planning to declare Rwanda a safe country against all evidence, so the PM, Jenkyns, Braverman, and many others act in the knowledge that their obvious lies will be accepted as reality by a part of the population and thus become reality in their heads. That acceptance is not the result of stupidity or ignorance, but an active statement of a quasi-religious belief in an alternate universe that one is so committed to that its relationship with reality simply does not matter. Again, we are getting close to what Feldman says about fascism…

Reading Braverman’s response letter to her sacking (not a ‘resignation letter’ since she was sacked) is like looking into a crystal ball showing where the Tory party is headed. As Robert Peston summarises it, the ‘broken promises’ Braverman reproaches Sunak in the letter include: Disapply human rights legislation in immigration cases; scrap all EU retained law and the Northern Ireland protocol; defend “biological sex” and reduce legal immigration by reducing overseas student numbers and increase the salary threshold for work visas. Given Braverman’s leadership ambitions, the letter can be read as the possible Tory party manifesto after the next GE if the Tories do indeed lose it. Doing ‘whatever it takes’ to stop the boats sounds ominous when coming from Sunak; when the same sentence is uttered by Braverman it sounds dangerous and scary.

One election away from fascism?

The black(T-)shirts are marching and rioting in London again – the only thing that can save us is a comprehensive electoral defeat for the Tory party next year. To avert that fate, all the Tories have left are manipulating the electoral system (by increasing the campaign spending limits, making Tory candidates even more buyable and British democracy even more plutocratic and corrupt), throwing peanuts at taxpayers (national insurance cut in the autumn statement), and the promise of more culture wars (the appointment of ‘anti-woke Minster’ McVey). With these measures, the Tories seem to continue their strategy to encourage British voters to punch down, so as to prevent them from getting any ideas about punching up.

One may be tempted to think that as long as the Tories still respect elections and their outcome, all is well. Indeed, the ‘primacy of the electorate’ may be the one hallmark of liberalism on Feldman’s list that Brexitism seemingly does not undermine. Yet, primacy of the electorate is not necessarily incompatible with fascism. The constant reference to the 2016 Referendum as the expression of the will of a unified and immutable ‘will of the real people,’ may formally sound like respecting the ‘primacy of the electorate.’ Yet, the reference to the Referendum, which – as Chris Grey discussed last week – is alleged to have conferred to ‘Brexitists’ a mandate for all sorts of things beyond exiting the EU. According to Matt Goodwin it conferred no less than a mandate “to permanently end what he calls ‘Liberal Centrist Dad politics.’”

It is not a coincidence that Brexiters refer to the Referendum more than the 2019 General Election to claim a popular mandate to do all sorts of things. It betrays a deep-seated (fascist) belief that somehow – and despite all the talk about Parliamentary sovereignty – the Parliament is not the real expression of the will of the people (perhaps because here the supposed ‘singular will’ of the one united people is divided into a plurality of competing parties) and a more direct way of expressing that ‘will of the people’ is needed. In fact, there can be little doubt that Brexiters do not take parliamentary sovereignty seriously at all, but rather would favour removing powers from parliament in favour of the government. There have been various signs of this executive ‘power grab’ by various Brexiter governments since 2016 (see also the reference in a previous post on this blog). Support for crude forms of direct democracy (like a flawed single-majority, binary referenda) and for concentrated executive powers are very much in line with a fascist understanding of democracy where - government would “no longer depend on the intrigues and manoeuvres of conflicting parties, but on the will of the nation directly expressed.” These are the words of Oswald Mosely as cited by Robert Saunders.

I have been writing for a while that the next General Election – and the one after perhaps even more so – will be crucial for our country. The past few weeks have convinced me even more that there is one more General Election that stands between us and fascism. Of course, I am not arguing that we will soon have a secrete political police and concentration camps in the UK, or that we will descend into a pure autocracy like Russia. To cite Saunders once more: “While there is no serious challenge to democracy as an abstract principle in Britain, democracy comes in many forms. At present, we are at risk of normalizing authoritarian versions of democracy that seek to shut down dissent and minority opinion by labelling them as anti-democratic.”

In line with that diagnosis, what I am arguing is that the events of the past weeks have illustrated increasingly clearly that under Tory rule we are moving away from liberal democracy into something different. Given the events and trends described in this post, just like Trump 1.0 will pale in comparison with Trump 2.0 in case of victory next year, so the authoritarian version of democracy that the next Brexitist Tory government could impose on us would have a lot more in common with fascism than with liberalism and Brexit may reveal itself to have become Blackshirts Brexit.

Brexit Impact Tracker – 8 November 2023 – Honesty Is not An Option: Evolving pro-Brexit arguments in post-truth Albion

When I started this blog, the idea was to document the impact of Brexit on the British economy, polity, and society so as to be able to assess its possibly subtle and long-term effects. Somehow – I guess – I was expecting there to be similar blogs from the pro-Brexit side celebrating in return the positives resulting from Britain’s exit from the EU. While I always was convinced that the negatives would outweigh the benefits, I was not excluding – indeed actually expecting – some of the Brexit benefits the ‘Leave’ campaigns promised to be realised.

A Brexiter government like Johnson’s – wedded, as they were, to a hard Brexit – could of course not do much to avoid damaging trade and the economy. What such a government could have done, though, was to use the instruments of the state to deliver on those promises that it had control over. The most obvious one perhaps would have been the £350m a week for the NHS. While the £350m a week figure was inaccurate and EU membership never prevented the government from properly funding the NHS anyway, given that a sizable proportion of the British public came to believe that slogan, the government did have it in its power to find £350m a week somewhere, invest in the NHS and then claim that thy delivered on the promise. That did not happen (even though Brexiters continue to claim it did).

Similarly, on ‘levelling up’ the government could have invested money in the North of England and then claiming that Brexit had worked, even it that money may have meant higher public debt, higher taxes, or cuts elsewhere. That too did not happen.

On immigration, another big Brexit promise, the government could have decided against leaving the Dublin Convention – that allowed the UK to return asylum seekers to EU countries – and thus avoiding – after 13 years in power – having to come up with yet another three-word slogan while watching immigration becoming another obvious Brexit failure.

Yet, as a result of the incompetence or unseriousness of Brexiters in office, my self-imposed task of documenting the Brexit impact has become a challenge not so much because of the difficultly of weighing up the positives and the negatives, but rather due to the sheer amount of damage Brexit is doing up and down the country, left, right and centre, and across sectors. If my goal was to show Brexit damage, rather than assessing Brexit impact, I was certainly spoilt for choice. To cite the perhaps most comprehensive and systematic source, the Davis Downsides Dossier now records 1419 Brexit downsides against just 32 upsides, while official reports on Brexit benefits mostly talk about blue passports and pint glasses.

So, nearly three years on from real existing Brexit, I sometimes feel like my work here should be done. Given the egregious nature of Brexit failure, we should all be able to accept that Brexit has not worked, and we could move on to solving some of the real issues that need solving. An by and large, the British public seems to agree with my assessment. Polls seem to confirm that most people now consider leaving the EU was a mistake (54% of people according to latest polling).

Yet, despite the egregious failure of the project – both on its own terms and on the terms of those who were opposed to it –, there remains a sizable part of the population who still see it as the right decision (34% according to the same poll). There may be many reasons for that assessment – amongst other things the argument that Brexit never was about the economy, but about “sovereignty.” There is some truth to that claim in the sense that the single most important reason Leave voters gave for their choice was the ‘taking back control’ argument (49% according to this source), with only 6% saying they voted to leave thinking it would be good for the economy. The reality, of course, is that Brexit was very much sold as a ‘no downsides’ endeavour (a statement that David Davis distances himself from now), that would turn the UK into a ‘nimble,’ prosperous and powerful Global Britain, doing more business and more trade thanks to new Free Trade Agreements (FTAs).

As none of these promises have been obviously met – and some obviously betrayed – and given that honesty is not an option, Brexiters become more and more inventive in their attempts to justify the unjustifiable. This can be illustrated by a new report from the Institute for Economic Affairs (IEA) on post-Brexit trade, which provides a perfect case study in ‘post-truth economics,’ which the Brexit saga has given rise to alongside post-truth politics.

The IEA Brexit Miracle Report

The new report by Catherine McBride entitled ‘Has Brexit Really Harmed UK Trade? Countering the Office for Budget Responsibility’s claims’ is a truly fascinating piece of post-truth economics. As the (largely rhetorical) question in the title and the sub-title suggest, the aim is to demonstrates – come what may! – that it has not. As such, the report provides evidence for a genuine economic miracle: It is possible to erect trade barriers with your largest trading partner without that having any negative impact on trade flows and your economy! The report’s revolutionary findings could lead to rethinking decades – nay centuries! – of arguments in favour of free trade! Coming from the IEA, that is truly astonishing!

Sarcasm aside, before I delve into the details of the report, it is worth noting the context and tone of the report. As the subtitle suggests, this report saw the light of day because pro-Brexit IEA felt the official statistics used by the government’s own experts painted too negative a picture. So, it is a purely defensive piece of work. That in itself tells us something about how Brexit is going.

Similarly, given the sheer effort that went into trying to rebut the OBR’s findings, the headline finding of the report sounds rather underwhelming: “Contrary to initial concerns, Brexit has not had a major detrimental effect on UK–EU trade.” Two interesting points about this statement: ‘Contrary to initial concerns’ seems like an odd statement given that the whole case for Brexit was made – certainly in the way the IEA made it –  on a promise to boost trade and economic growth. So, IEA certainly never told us about these initial concerns. Secondly, the best case for Brexit three years on seems to be that it has had no ‘major detrimental effect.’ Just think about that for a minute.

 Now, as for the arguments made in this new report, I will start with the (fatal) flaws and then turn to the tricks used to make us believe the unbelievable, before addressing the new post-truth rhetorical devices employed to make us accept the unacceptable.

The flaws

I identified three fundamental errors in the ‘analysis’ (I put analysis in inverted commas, because it really just amounts to summing up trade volumes and values and eye-balling differences in percentage changes) provided in the report – each one of which in itself fatal to any hopes for the analysis to produce any meaningful findings. (I have written about the Brexiter Economics of Patrick Minford, David Frost, Graham Gudgin, and Steven Tombs which all make similar mistakes, but it would seem that pro-Brexit economists do not read my blog).

Benchmark year

First, the ‘analysis’ assumes that the benchmark for assessing post-Brexit trends in trade should be the last full year of trade data immediately before Covid and Brexit, namely 2019. That is an odd choice, because it cuts off a period where Brexit had already had a negative effect on UK trade and thus sets a low bar for post-Brexit trade. The best and most sophisticated econometric attempt to measure this that I am aware of remains Mustapha Douch and Huw Edwards’ analysis using a synthetic control model. Their findings are summarised in a submission of evidence to Parliament (here).

What their findings tell us regarding the appropriate benchmark year, is that it should be chosen earlier than 2019 – indeed even before the referendum. Their work shows an impact of (the risk of) Brexit as far back as the General Election of May 2015. The risk of Brexit happening was enough to make companies change their investment and trade decisions to hedge their bets. In the IEA report, McBride gives the example of Jaguar Land Rover moving the ‘production of the new Land Rover Defender to Slovakia in December 2015’ - well before the Referendum – as evidence that the UK’s regulatory and tax environment, not Brexit, triggered that move. Douch and Edwards work, suggest that it may typically be the sort of decision that was already influenced by the possibility of Brexit and would perhaps have gone the other way were there not a Brexit referendum looming a few months later.

Regardless, by 2019, UK trade was already lower compared to what it would have been without the Referendum campaign and the chaotic years that followed. Choosing 2019 as a benchmark means setting the bar very low for Brexit success, which – again – tells you something about Brexiter confidence in their project.

McBride does acknowledge that to assess trade flows, the date of the referendum should be looked at too. But she brushes aside any impact by stating that “In 2015, before the Brexit vote, all commodity exports to the EU were £132.9 billion, but by 2019 they had risen to £170.7 billion, a rise of 28.4 per cent.” There are various things wrong with this statement. For one the global evolution in commodity prices would have to be taken into account; for the other stockpiling is a well-documented phenomenon – especially in the run up to the original 29 March 2019 Brexit deadline – and would have had a significant impact on post-Referendum, pre-Brexit trade (see here box 1); But most importantly – and this is the trick used throughout the report – reporting trade figures in Sterling after Brexit is deeply misleading, due to the impact of Brexit on Sterling (see below).

A binary world trade view

The second fundamental flaw concerns the geographic comparison. What McBride does is comparing trends in UK-EU trade to trends in trade between the UK and the rest of the world (RoW). This betrays the typical Brexiter economics assumption of a Ricardian world where trade in finished goods takes place between dyads of countries. That leads to the illusion of a complete isolation of UK-RoW trade from any impact of Brexit. Thus, McBride posits (p.24) ‘only the UK’s trade with the EU would have been affected by Brexit.’

I have written about this flawed assumption before – which not just the IEA but also serious economists make. But in a nutshell, the fact is that trade in the 21st century is not 19th century style Britain exporting cloth to Portugal and importing wine from there. Rather, trade increasingly takes place in complex Global Value Chains (GVCs) where intermediary products cross multiple borders multiple times before finally being assembled into a finished good and then sold in various markets. That means – again as Douch and Edwards have shown – that Brexit does not affect trade just with the EU, but also with other countries that are part of our supply chains. So, comparing UK-EU trade with UK-RoW trade, assuming that the latter provides a benchmark for what would have happened without Brexit is fundamentally flawed.

Growth is success

The third fatal flaw concerns the definition of success. McBride essentially – implicitly – defines Brexit success as growth in trade between the UK and the EU on par with or above growth in trade with the RoW. So, if UK-EU trade after the end of the transition period in January 2021 grew as or more strongly than trade with the RoW, this is taken to show that Brexit was a success – or at least did not do any harm. Or in McBride’s own terms (p.13) ‘UK exports to both EU and non-EU countries followed similar patterns, so any decline in exports in 2020/21 cannot be blamed on Brexit but was presumably due to other factors.’

Again, that’s a nice, simple, and comforting view of the world. But sadly, the world is neither nice, nor simple, let alone comforting: The only valid benchmark for judging whether Brexit was an economic success or not is to compare the trade performance of real existing Brexit Britain with the counterfactual Britain that stayed in the EU. At the risk of repeating myself, the only way to get close to that counterfactual is to use sophisticated econometric methods such as the synthetic control method. That method is not perfect, but it is the only serious attempt to estimate what would have been without Brexit and hence the only type of analysis of post-Brexit trade patterns worth doing.

These fatal flaws set aside, there are several interesting tricks being used in this report to make the case ‘that the trade in both goods and services between the UK and EU hasn’t shown a discernible Brexit effect.’

The tricks

Keeping it (too) simple

Basically, the claim that there is no discernible Brexit effect on UK trade is based on a very simple comparison of the percentage change in the value of trade between the UK and the EU from 2019 to 2022 with the same figure for trade between the UK and the RoW. McBride finds that “exports to EU destinations increased by 13.4 per cent while exports to non-EU countries increased by only 5.7 per cent.” This, according to her approach, is evidence that there is no Brexit effect, because if “Brexit were a major disrupter of UK trade, we could expect to see a divergence between UK trade with EU destinations and UK trade with non-EU destinations” (p.8).

For the reasons mentioned above (2nd fatal flaw): Actually, we would not. But the passage where these arguments are made is interesting because of another simple trick, namely reporting figures in current Sterling values. That’s always going to draw a rosier picture than warranted due to the decline of Sterling since 2016.

On the day of the Referendum results Sterling fell about 10% within hours of the referendum. It is currently trading at 1.23 to the dollar compared to 1.46 in June 2016 before the referendum (see here). That is a 16% decline. Compared to 7 May 2015 – date of the 2015 General Election –, the drop is even steeper (22%). So, a 28.4% rise in exports in sterling terms has to be put into the context of the declining value of the pound. UK exports are worth more in sterling terms, simply because the same quantity of merchandise sold on the world markets will generate more Sterling, because it takes more of the weaker sterling to purchase it (or – more likely scenario – converting the foreign currency used to purchase it will generate more Sterling).

McBride  herself acknowledges that. She admits that “if we use deflated data then exports to EU countries fell by 7.2 per cent but decreased by 9.8 per cent to non-EU countries. This again makes it difficult to claim Brexit has hurt UK–EU trade.” (p.8). So, the argument here is that given that the decline in trade with the EU was less than the decline in trade with non-EU, there is no Brexit effect. The fact that her own calculations show that when adjusting for inflation a growth in trade between 2019 and 2022 with both EU and non-EU countries turns into a decline is not being commented on. She probably hopes that by that point in the report, readers will be so fixated on the (flawed) comparison of UK-EU and UK-RoW trade that they will forget what the negative sign in front of the figures means – namely that Brexit Britain is trading less than before exiting the EU even when comparing to the already reduced levels in 2019.

As a result, she confidently concludes “there has been no real disparity between UK trade with EU and non-EU countries. Nor has there been a sharp fall in UK–EU trade either at the aggregate or sector level despite it now being seven years since the vote to leave the EU and three years since the UK actually left.”

Why exactly a real terms decline of 7% with the EU and of nearly 10% with RoW is not considered a sharp fall and leads the IEA to the headline that UK trade was ‘unscathed by Brexit’ remains – of course – McBride’s and the IEA’s secret.

Reducing the problem to an accounting issue: Rules of Origin

The other trick the report uses is to point out that much of the decline in trade is due to the new rules of origin (RoOs) contained in the Trade and Cooperation Agreement (TCA). Indeed, these rules imply that exports that previously may have shown up in the statistics as UK exports are now recorded as goods from third countries. So, the decline in UK-EU trade in sectors like exotic fruit and clothing is merely an accounting artefact due to a change in what does and what does not count as UK product. Thus, McBride states “UK exports of clothing have halved from over £5 billion to just over £2 billion post-Brexit. However, these goods have been made outside the UK since the 1990s and under the TCA Rules of Origin will now be recorded as exports from the country of their manufacture.”

The problem with that argument, however, is that reducing the issue of rules of origin to a pure artefact of recording ignores the fact that these changes do come with very real impact on companies. In fact, under the TCA, reexporting goods without transformation (triangular trade) does not qualify for the preferential tariff but implies full tariffs. So, any company specialising in importing goods that do not comply with RoOs from third countries and re-exporting to the EU will now face tariffs, which also invalidated McBride’s claim that ‘[a]s the UK and EU have tariff-free and quota-free trade, only non-tariff barriers could reduce UK trade with the EU.’ (p.27). For some goods, tariffs still apply.

False proxies

Another trick – or maybe just lazy economics – is to extend the arguments made from trade to investment in order to attack the OBR’s famous 4% long-run decline in productivity prediction. McBride rejects the OBR’s prediction ‘that lower trade would be caused by lower investment in the UK due to Brexit uncertainty’ (her words not OBR’s).

She rejects that prediction stating that ‘[i]t has been suggested by the OBR that two fifths of the impact from Brexit on UK relative productivity occurred between the Brexit referendum in 2016 and the signing of the UK–EU TCA in December 2020, caused by lower investment which in turn caused lower trade’ (emphasis added); and to continue ‘[t]his is not apparent in the trade data: UK–EU trade continued to grow from 2015, before the Brexit referendum, until 2019.’ So here the fact that trade – in current prices – did not decline is used as a proxy to reject the OBR’s claim about impact of investment on productivity.

If you look at the OBR report that McBride cites, it becomes clear, that the OBR’s formulation (p.46) about the link between investment and trade is subtle: “In 2023, imports fall by 4 per cent, dragged down by lower consumption and investment, while exports fall by 6.6 per cent. […] Exports return to growth from 2025 onwards while import volumes continue to fall, partly due to the fall in import-intensive components of business investment as the temporary capital allowance measure ends.”

So, it is clear that the OBR does of course not claim that lower investment is the only factor affecting trade – as McBride suggests –, and that investment is expected affect imports rather than exports. So, the problem with McBride’s trick is that none would claim investment is the only factor affecting trade – trade can decline when investment is up if other factors (new trade barriers for instance) are erected. Conversely, trade is a poor proxy for investment, given that many other things (e.g., new trade barriers for instance) will affect trade independently from investment. Therefore, refuting OBR predictions about investment and productivity based on trade data is fundamentally flawed or dishonest or both.

Instead, McBride should have looked at post-Brexit investment directly. Let us do that her for the sake of completeness.

Investment

A fairly recent brief by PNB Paribas on the impact of Brexit on Foreign Direct Investment (FDI) into the UK makes for interesting reading. The report draws a positive picture stating that ‘the UK is still attractive for foreign investors.’ Indeed, comparing FDI flows between 2009 and 2015 to those between 2016 and 2022 the brief finds ‘that inflows (i.e., investments in the UK by non-residents) rose from 1.6% of GDP from 2009 to 2015 to 3.1% from 2016 to 2022.’  So, is McBride right to rebut the doomsayers after all?

Digging a bit deeper in what PNB Paribas find, the answer is clearly ‘no.’ In fact, breaking down the FDI inflows makes it clear that the overall increase is very largely driven by FDI capital inflows, which went up from 1.6% of GDP between 2009 and 2015 to 2.6% between 2016 and 2022.

What does that mean? The capital part of FDI includes the money that goes into corporate equity, i.e., foreign companies buying stakes in British companies.

This considerable increase in FDI flowing into existing British companies is indeed partially a direct effect of Brexit. In fact, the two most obvious reasons are a very weak Sterling compared to other currencies – most importantly USD – and relatively low stock exchange valuations of British companies. This makes UK companies very attractive targets for foreign takeovers. As Joshua Warner from City Index puts it: “A US company, for example, scouring the UK for a target can get much more bang for its buck because the dollar has strengthened so much against the pound.” Therefore, the continuing attractiveness of the UK as a destination for FDI seems to be primarily a result of the fact that the British economy is struggling and therefore British companies are a bargain.

So, are the FDI figures good news for the UK economy? Will such takeovers create new jobs? Some will, but only if they come with investment in productive capacity rather than investors merely taking advantage of an arbitrage situation. The fact that real business investment (foreign and domestic) in the UK remained +1.2% below its third quarter 2016 peak suggests that increased FDI does not help overcome a decline in business investment in productive capabilities, which in turn will affect productivity growth. In other words, instead of many new jobs and investments in productivity enhancing technologies, many – but not all – foreign takeovers may rather lead to restructurings and layoffs, to the repatriation of profits from the UK to the buyer’s headquarters, and ultimately to a shift away of the centre of corporate decision making from Britain to the acquiring country. Taking back control and all that…

Evolving post-truth economics

 Deep down, I feel, McBride and the IEA know that the figures provide pretty clear evidence that Brexit has not been good for the UK trade performance. Rather than honestly admitting that and thinking about ways of addressing the issue, the IEA dives deeper down the rabbit hole of post-truth economics. Two new rhetorical tricks are used in the report: Firstly, an interesting new ‘social justice’ claim that UK exporters should pay for border checks; and secondly, an equally interesting new claim that trade is overrated anyways.

A Brexit ‘user pays principle’

The report acknowledges that there are some new costs for exporters as a result of new trade barriers. But these are spun as a positive change towards a ‘user pays approach’ to UK-EU trade. McBride states (p.7) “While the UK was a member of the EU, taxpayers were paying for that membership. Among the beneficiaries were firms trading with the EU. These companies now have to pay for their own compliance when they trade with the EU as all companies do when they trade with non-EU countries. These costs will be either passed on to their customers as higher prices or absorbed as a business expense, but these costs will no longer be paid by all taxpayers.”

So, EU membership is now presented as having been unfair, because taxpayers were footing the bill for Single Market (SM) access, while companies benefited from it. The suggestion seems to be that this is somehow a case of freeriding that may be unfair for people who do not export. Indeed, the EU membership fee is considered constituting a ‘subsidy’ for importers and exporters.

This is a truly extraordinary argument. Not only does it ignore the fact that many companies – although not all! – are UK taxpayers too; but also the estimated £250m a week cost of EU membership gave British people and businesses access to such a variety of things, that the cost of frictionless trade with the SM – which was mainly a cost of regulatory alignment and enforcement – can hardly be seen in isolation, or without considering the benefits to consumers in terms of choice and lower prices. Assuming for a minute that such a calculation made any sense, whether or not each individual exporter’s tax contribution – and hence contribution to the membership fee – was lower than the gains generated from trade with customers inside the SM – and thus constituted a ‘subsidy’ – is far from obvious.

And even if it did, the benefits not just to the firm but the country almost certainly would outweigh the cost of that ‘subsidy.’  To take an everyday example: I’ve been staying in Paris on study leave for the past month (I know citizen of nowhere and all that). Before Brexit, I could have used my data roaming without any extra charge. Now my mobile provider charges me £.1.67 a day. So, Brexit has a very real cost for me, namely £1.67 a day. That’s £11.69 a week. Conversely, while an EU member, not having to pay this amount was one thing the membership fee paid for. If we multiply that by the UK population of 67.3m, the country as a whole benefited from £786.73m a week in saved roaming charges. So, saving on roaming charges alone would have made the membership fee worth it roughly three times over. Yes, I know all 67.3m Brits are never overseas, or actually use mobile data, but the point of this admittedly somewhat frivolous example is that £250m a week is not all that much in comparison to the variety of things Brexit membership paid for. So, taxpayers paying for SM access for exporters and importers probably was not such a bad deal.

Trade is overrated

The other astonishing argument made in the report is that, actually, too much trade is not a good thing. McBride states: ‘It has also been claimed by some economists that the UK’s trade intensity is too low, and that this is both a bad thing and due to Brexit.’ Yet, ‘[c]ountries with high trade intensity are more susceptible to external shocks.’

This is an astounding new argument given how much was made of Global Britain and the new trade agreements that were going to provide us will all those new business opportunities, suggesting becoming an export economy was part of the plan. That’s not going to happen and Brexiters know it. So, their arguments now evolve towards a more isolationist position where trade is overrated and what is needed instead is low taxes and deregulation to boost economic growth (see p.30).

The spinning-head strategy

It has taken me a considerable amount of time to go through this latest IEA report, get my head around the arguments, think about their validity, and then assess them against what serious research has found. More time, perhaps, than I should spend on these types of things I guess – but definitely more time than the average UK citizen will ever spend engaging with assessments of Brexit impact on the UK economy…and that is exactly what Brexiters are banking on. Flooding the public sphere with a never-ending stream of newspaper articles, op eds, reports, TV and radio interviews repeating the same debunked arguments over and over again. They simply make one’s head spin. And that is what they are meant to do. So, I feel this blog can now play a role not so much in compiling factual information about the impact of Brexit, but rather pushing back against the post-truth economics and politics that Brexit has given rise to.

To be sure, this may have a counter-productive effect. Trying to assess the validity of the arguments, I maybe contribute to providing visibility to these falsehoods, which is oxygen to the populist fire of rather than extinguishing the flames with – what I hope is – cool and rational reasoning. Indeed, the post-truth type lies that Brexiters spew out into the public domain live off publicity – positive or negative. Just like honest attempts to debunk Johnson’s £350m a week lie actually helped that claim to become more popular, so my blogging about the IEA report may only make it more visible. It is the bitter irony of debunking populist lies, that few people will remember the details, and many people will remember that there was a ‘debate,’ a ‘controversy’ around the impact of Brexit on trade. However strong the evidence is stacked against the Brexiters’ false claims; however convincing – or not – my counter arguments may be; in a polarised society people pick sides on affective and ideological grounds not based on rational argumentation.

So, keeping the Brexit debate alive by engaging with Brexiter propaganda may very well lead at one point to a reignition of the vitriol and venom of the post-Referendum years. Indeed, another recent rhetorical strategy by Brexiters has consisted in what Chris Grey calls the Brexiter Blackmail: ‘Let’s move on, lest we will use the media outlets we control to poison the public debate again.’

Still, I remain convinced that on balance moving on is the wrong thing to do and we should continue to ‘bremoan.’ The far-right populists running the country will have won when we stop challenging them. When we are too exhausted, tired, and demoralised to even argue with them anymore. While that is sometimes difficult to do, I am hoping with my posts I can help others a little bit to stop their heads from spinning.

Brexit Impact Tracker – 22.10.2023 – Un-British Brexit Benefits

A headline that caught my eye this week was on the Belfast Live web page and contained the phrase “our Brexit bonanza has gone south.” The Northern Irish journalist – Pat McArt – was referring to the astonishing boom at Rosslare port in County Wexford, Republic of Ireland, which has seen an increase in the number of sailings from the port to the Continent from 6 a day in 2015 to 36 a day in 2023; leading local authorities to launch a £300m investment project to expand capacity and local businesses reporting significant increase in business –  by 400% in the case of the transport company McArt interviewed for the piece. The explanation according to the director of the same transport business could be summarised in one word: Brexit.

Brexit benefits do exist then…but sadly – albeit predictably – they are not for us, as Northern Ireland fittingly illustrates.

Not for EU – Not for you?

Not for EU’ almost sounds like yet another three-word Brexiter slogan capturing how we have ‘taken back control’ – keeping more for ourselves, giving less to the EU. It is quite the opposite: Namely an indicator of the rights and freedoms British business have lost due to Brexit – here, selling their products in the EU Single Market without additional paperwork.

The ‘Not for EU’ label is being introduced in three phases as a result of the Windsor Framework (WF) regulating GB – NI trade, which came into force in October 2023 (Chris Grey has explained the details very expertly and thoroughly on his blog last week). The WF was adopted to smoothen trade across the Irish Sea Border between GB and NI and to make that border as invisible as possible. Ironically – but predictably – it seems to be creating a whole lot of new bureaucracy for firms exporting meat and dairy (and from 2025 fruit, vegetables, and fish) increasing their costs and the time it takes to export to NI.

Specifically, the framework creates a customs ‘green lane’ with limited paper work for goods destined for Northern Ireland only (and clearly labelled as such – hence ‘Not for EU’) and a more paperwork-intense ‘red lane’ for goods destined for re-exporting from NI into the EU via the Republic of Ireland. The – unintended – dilemma this creates for GB exporters is that if they choose the green lane to reduce administrative costs, this will drastically reduce the pool of potential buyers of their goods (from an estimated 449m people living in the EU Single Market (SM) to 1.9m living in NI) – thus making exporting less efficient despite reduced paperwork (Note: reduced paperwork compared to the situation under the Northern Ireland Protocol (NIP) alone, not compared to the situation before hard Brexit of course!). Conversely, choosing to export for both the NI and the EU market to tap into the massive EU SM means incurring higher border admin costs in terms of certification and documentation of standards. For some firms that dilemma may be solvable, for others it may simply not be worth exporting to NI anymore.

However, even if a UK business in the relevant sector decides not to export to NI anymore, it will still incur some additional costs due to the new regime. The reason for that is that the UK government has decided to require ‘Not for EU’ labelling not just for relevant goods for exporting to NI, but for all relevant goods across the UK (from next year). This move was justified by James Cleverly on ‘practical and philosophical’ grounds. The practical one being that having one single labelling system may be more cost-efficient for retailers anyways; the ‘philosophical’ one being unionism. Indeed, the move was seen as an attempt to signal to the Democratic Unionist Party (DUP) that NI is not treated any differently from any other part of the UK and that its place in the UK has not changed with Brexit.

That gesture never was going to convince the DUP and other unionist forces in NI of course. Their (maximalist) ‘seven tests’ for an acceptable post-Brexit border arrangement would require a much more ambitious solution than the Windsor Framework will ever be able to deliver and the EU will ever be willing to accept – at least within the parameters of the DUP’s own preferred version of hard Brexit. Indeed, as long as the UK stays outside the SM for goods and does not conclude any agreement on dynamic alignment on EU standards, it seems simply impossible for there not to be any checks – however light touch – on goods moving from GB to NI. As such, the 5th test on the DUP list (‘no checks on goods between GB/NI’) at least can never be fully met. The question is whether or when the DUP will start accepting that and rethink its position, rather than standing paralysed in the corner into which it manoeuvred itself by first supporting Brexit, than cheerleading the hardest possible version of it, and then refusing to accept all the logical and necessary consequences of having gotten what they had wanted all along.

As his speech at the DUP party conference suggests, party leader Jeffrey Donaldson still seems to be paralysed in that corner, staring into the headlights of the electoral truck that is about to hit him. With the General Election looming next year, the DUP having been overtaken by the nationalist Sinn Fein in recent local elections, and his position as party leader seemingly entirely depending on defending a hardline position on post-Brexit trade arrangements to fend off challenges from unionists further to the right, it is hard to see how Donaldson can manoeuvre himself out of the lose-lose situation he currently is in. In particular, restoring the power-sharing Stormont government that the DUP has collapsed in February 2022, while still popular with unionist voters, may become untenable in the mid- to long-run. Ending it will most certainly mean accepting the WF in a form that’s very close to its current shape and that will mean accepting something that will certain fall short of more than one of the DUP’s seven tests. Indeed, claims by Donaldson that there is progress in his negotiations with the UK government about the implementation of the WF are simply not believable, because the UK government could not possibly agree to anything that would amend the facts created by the WF – after long and arduous negotiations with the EU – to the extent that the DUP’s seven tests would be met. Donaldson’s hope is probably that the UK government will agree to something that he can then claim does meet the most important ones and use this as a reason to return to Stormont without losing face. Yet, it is unlikely that whatever that agreement is will satisfy the hardliners amongst the unionists and Donaldson’s position as party leader would most likely become very precarious.

In short, then, the ‘Not for EU’ label is another case where more costs are being piled onto UK businesses to implement a border regime that has become necessary for political and ideological (Cleverly would say ‘philosophical’) – not technical or economic – reasons, i.e., to make the necessary Irish Sea border seem as thin as possible to make it acceptable to unionists. Yet, the chosen ‘solution’ will most likely not achieve its political goal and indeed only constitutes an exercise in damage limitation anyways (without hard Brexit, no Irish Sea border); but it will develop all sorts of unintended consequences for UK businesses and consumers.

One predictable such consequence is that there are already signs that UK consumers may – mistakenly – believe that the ‘Not for EU’ label means the products carrying this label are of lower quality compared to other products (which is not necessarily the case as Chris Grey explains). How ironic it would be if UK consumers ended up believing that ‘not for EU’ in fact means ‘not for you’ and increasingly started to choose non-labelled products, amongst which will be products imported to the UK from the EU…Another Brexit benefit accruing outside Britain’s borders?

The deregulation, divergence disaster

At a more general level, the ‘Not for EU’ label is the result of the continuing refusal of the UK government to align its regulatory regime dynamically on EU standards – in this case in the area of sanitary and phytosanitary (SPS) rules. There is no sign of Brexiters admitting anytime soon that such dynamic alignment across a range of sectors would solve many of the practical problems caused by Brexit. To the contrary, the more Brexit turns into a right mess, the more Brexiters retreat into the defence that this is a result of Brexit having been done too timidly – i.e., not enough divergence from EU rules has happened. That was for instance Farage’s excuse that I wrote about last week. Similarly, Business Secretary Kemi Badenoch continues to be firmly stuck in the ideological Tory straitjacket of deregulation. In spite of increasingly loud voices from businesses for the UK regulatory regime to remain aligned with the EU’s, she has launched a new – according to Anthony Robinson 23rd! – attempt to identify ‘red tape’ that can be cut to stimulate economic growth. The reasons for this move are ideological and political – in her case, her scrapping Jacob Rees-Mogg’s Retained EU Law bill, which would simply have disapplied EU rules by default by the end of this year has damaged her standing with Eurosceptics in the Tory party and thus her leadership ambitions. Clearly there is little insight in the Tory party that their deregulation fanatism invariable ends either in a damp squib, or in disaster.

Besides the ‘Not for EU’ label mess, another recent illustration of just how easily divergence generates unintended – and very costly – consequences for the UK is Sunak’s anti-green turn. His backtracking from the UK’s commitment to Net Zero involved among other things increasing emission allowances to polluting firms. As a result of Sunak’s move, the carbon price under the UK Emission Trading Scheme (ETS) has plummeted, and is now well below the price of emissions inside the EU. This clearly sounds like the sort of ‘divergence’ from EU policies that the libertarian ‘free enterprise,’ ‘pro-growth’ fringe of the Brexit movement would be very happy with.

In the real world, however, this has had the unintended (but – once more – very predictable) consequence that the UK Treasury’s revenue from the carbon tax will be billions of pounds lower than predicted a few months ago. Instead, rather than paying the tax to the Treasury, British exporters will likely pay large amounts of carbon tax to the EU. That is because the EU’s new carbon border adjustment mechanism (CBAM) means that from 2026 exporters from countries with lower carbon prices than the EU will have to pay a tax to adjust for the differential. This is still a few years away, but it is another illustration how diverging from EU regulations and policies (here in terms of carbon pricing) may be politically attractive (by seducing the climate sceptic wing of the Tory party) and perhaps have some short-term economic (but certainly not environmental and societal) benefits by reducing costs, thus allowing polluting industries to thrive once more, but create unintended negative consequences not just for UK businesses but also the British state. In the case of carbon pricing the combination of UK government laxist stance on emission allowances combined with the EU’s CBAM essentially mean a transfer of tax revenue from London to Brussels. Yet another Brexit benefit, accruing to others…

It is not without irony that the ultra-nationalistic Brexit project seems to increasingly benefit anyone but the Brits (New Zealand’s and Australia’s farmers could be added to the list)!…If Brexiters do not learn their lesson, this could turn into a very un-British Brexit indeed!

Brexit Impact Tracker – 10.10.23 – A Halloweeny Tory Conference: Zombie Politicians & Horror Shows

The past couple of weeks have been dominated by the 2023 Conservative Party Conference (CPC23) and the Prime Minister’s decision to cancel the remaining stages of the High Speed 2 (HS2) rail project. Both events may provide glimpses into the future of our country – and it is not pretty. The CPC23 was indeed filled with all the monsters and horrors of an early Halloween Party.

The CPC23 horror show

The CPC23 has provided various speeches and events that have left me – and visibly other commentators – with a sense of horror and disbelief. To mention just the most egregious things that happened during the conference: A Home Secretary’s openly nasty and hateful speech drawing on conspiracy theories and stirring up displacement fears; A former Prime Minister (PM) who just a year ago nearly wrecked the UK’s financial system and inflicted massive financial hardship on thousands of home owners is given a platform to continue to spread her nefarious libertarian economic ideas; the former UKIP leader – the party that caused Brexit and pushed the Conservative Party over the edge into National Conservative territory – getting more media coverage at the conference than the PM himself; a former Cabinet minister who had to resign from cabinet posts twice (here and here) using her speech to praise a rentier-financed fake news channel that claims to speak truth to the people and then being filmed singing and dancing merrily with the former UKIP leader; and a PM using the possibly last conference speech before the next General Election to announce the hugely controversial cancellation of the largest infrastructure project the country has seen in decades while trying to make us believe that – just like reducing Britain’s commitment to Net Zero – somehow that shows a commitment to “long-term decisions for a brighter future” (What that gaslighting slogan also implies, of course, is that tee PM admits that things currently are not bright and that in the short-term the government cannot fix that). One particularly bizarre moment – and the bar is very high here – was Penny Mordaunt’s cringeworthy pseudo-Shakespearian monologue about ‘standing up and fighting.’ While Penny Mordaunt urges her fellow party members to ‘stand up and fight’ for the ‘freedoms we’ve won’, a few doors down the hall a heckler was being booted out of the hall for daring to vocally disagree with something Suella said in her speech. Equally schizophrenic is the Tory’s rampant crusade against the nanny state and the absurd fearmongering around the ’15-minute city’ which no other than the UK’s Transport Secretary sees as a plot by local councils to monitor people and prescribe them when they can go to the shops; while the very same anti-nanny state party will ban smoking.

If you take a step back and try to forget for a moment what has happened to the UK in the past 13 years, the CPC23 will seem nothing short of surreal. What we are witnessing is what Chris Grey calls the ‘UKIPisation’ of the Tory Party, which means the UK’s governing party is increasingly occupying the territory of what back in 2006 still seemed to leading Tories the home turf of ‘fruitcakes and loonies.’ It leaves one with a profound sense that this country urgently needs a different government to stop its accelerating descent into madness.

Here a particularly bizarre and horrific phenomenon at the CPC23 was the prominence of ‘zombie politicians,’ which I have written about before. Just like Johnson a few months ago, discredited politicians like Truss and Patel clearly are counting on a comeback. In post-Brexit Britain’s political swamp, committing criminal acts, wrecking the country’s economy, being ousted in the most shameful fashion does not preclude politicians from returning to the spotlight, head held high, pretending that they can solve the problems they themselves to no small extent caused.

The conference also indicated, however, that a period in opposition will not necessarily do the Tory party any good by providing an opportunity for renewal and a new – more reasonable – leadership to get a grip on the party. Rather, it seems increasingly certain that once out of power, few things will stand in the way of the party being completely taken over by a radical right-wing faction copying a US-American style of extremist libertarian, anti-state, nativist, and intolerant national conservatism. Indeed, Braverman, Truss, Patel and in fact possibly even Farage seem to eye a possible takeover of the party. All of them are so far to the right that they make Sunak – himself a right-wing Thatcherite and Brexiter – look like a moderate.

Symbolic FTAs’ real-world impact

In the margins of the CPC23, The News Agents interviewed Farage and asked about the failure of Brexit. In Jon Sopel’s words: ‘Brexit has been a bloody disaster…what have we gained?’ To which Farage’s response was: ‘Our standing in the world is very different.’ Rejecting Sopel’s insistence that it was lower, Farage continued: ‘The AUKUS deal, the pacific trade agreement, our leadership on Ukraine – whether you agree with it or not – are all things we could not have done as EU members. On the global stage – big success. Domestically – well – look at the GDP numbers. We’ve grown more than Germany, about the same as France since we left. However, a lot of Brexit voters [are] very disappointed. Millions of businesses who thought red tape would get lifted – it hasn’t happened.  And the idea we got to control our borders has become laughable. So, look I’m disappointed in the delivery of Brexit. Very disappointed. But we’ve still done it. The big constitutional leap has been made and its not gonna get reversed.’

There is some truth in this statement – not the bits about AUKUS, Ukraine (both of which could have happened without Brexit) – or the GDP figures (comparisons only make sense if compared to the counterfactual of the UK not leaving the EU) but the one about the trade deals. They indeed could not have happened inside the EU, which “has exclusive power to legislate on trade matters and to conclude international trade agreements” on behalf of its members.

A brand new report by The UK in a Changing Europe on ‘Bregret’ has shown that the signing of Free Trade Agreements (FTAs) with non-EU countries is literally the only real ‘Brexit benefit’ Leave voters can come up with (the other Brexit benefit Brexiters can think of is the Covid vaccine role out – but that of course is not a real Brexit benefit, but an often debunked falsehood). On FTAs though, Brexiters are right that these could not have been concluded while an EU member…To what extend are they a ‘benefit’ though?

The recklessness with which a succession of Brexiter governments, in pursuit of their Global Britain fantasy, have entered into ‘world-class’ FTAs starts having real-world effects.

Not only are Britain’s new FTAs not perceived around the world as a sign of Global Britain’s ‘nimbleness’ and ‘strength,’ but rather something that generates disbelief and ridicule. Remember the Australian reaction to the new UK-AUS FTA? Or New Zealand’s media reporting in disbelief about the one-sidedness of their deal with the UK? Indeed, as Chris Grey shows in his blog this week, countries as different as China, India, and the US report on Brexit as a disaster and a fatal folly. Quite contrary to Farage’s assertion that Brexit has raised Britain’s standing in the world, it has quite literally turned the country into a laughingstock.

Worse still, desperate for symbolic victories, the UK government’s sign FTAs in a rush and on disadvantageous terms will do very little to compensate for lost trade with the EU, but still have very material consequences for British consumers and producers. Thus, the UK’s joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has been lauded as the biggest trade deal the UK has struck since Brexit. Yet, in yet another predictable but probably unintended twist, Canada’s meat and cattle industries has launched a campaign to block UK membership as long as the country prohibits meat imports from Canada on food safety and public health grounds. Brexiters, of course, are unperturbed, since the potential negative health impact of hormone treated meat can be shrugged off as another form of ‘project fear’ driven by ‘snowflakes and concerns about animal cruelty can be rejected as ‘wokery.’ Yet, the fact is that one of the Brexit promises was and remains that food standards and safety would not have to be sacrificed to do trade deals with new partners. Now, Rees-Mogg explicitly promotes the import and consumption of hormone injected beef. Rather than increasing our standing in the world and making us stronger, Brexit is making us desperate and vulnerable.

Common sense v. the truth: Meat tax and 15min cities

Meat was at the centre of another illustration of the Tory party’s descent into post-truth madness: On Sky News, Sophy Ridge challenged Claire Coutinho, Secretary of State for Energy Security and Net Zero, regarding the latter’s CPC23 speech that suggested Labour was proposing a tax on meat to discourage consumption. Coutinho’s defence seems like something right out of Orwell’s Ministry of Truth. It essentially boiled down to her saying: No, the Labour leader did not propose a meat tax, but he very well could have – (except that he has not of course!).

Those who are trying to remain sane amongst the gaslighting, falsehoods, and lies spread at the CPC23 were given a new challenge in the form of Home Secretary Braverman’s newly minted three-word insult/slogan ‘luxury beliefs brigade’ – probably to rival Truss’s ‘anti-growth coalition.’ The phrases was lauded in his Mail column by ‘pound shop Carl Schmitt’ Matthew Goodwin. Braverman accused the ‘luxury beliefs brigade’ of sitting ‘in their ivory towers telling ordinary people that they are morally deficient because they dare to get upset about the impact of illegal migration, net zero, or habitual criminals.’ Goodwin parrots her, blaming the ‘smug ranks of virtue-signallers who, cocooned by affluence, are personally protected from the disastrous consequences of the policies they advocate, such as the abandonment of robust policing in inner-cities.’

There is a lot to be said about these two statements. For instance that the lack of robust policing in inner-cities is much more attributable to the Tories hollowing out of public services and cutting policing resources (while carefully making sure that manifesto pledges are met on paper, albeit not in substance), rather than an alleged policy preferences of liberals for unsafe streets. But more fundamentally, the worrying trend here is that the public is now made to believe that our most basic rights and believes in a liberal and just society are somehow optional add-ons that Britain can no longer afford. That is a declaration of bankruptcy by the Tory government. Had they done a good job over the past 13 years in power, surely everyone in this country should be able to afford ‘luxury beliefs.’ Instead, the right-wing of the Tory party is preparing to rid off us more of the luxuries of civilised society that generations of social activists and reformers have fought for.

To add insult to injury, all this is done under the banner of ‘common sense.’ The Daily Mail for instance just like Tory MP Esther McVey declared the PM’s speech – axing HS2 and declaring ‘a man is a man and a woman is a woman’ – a ‘common sense revolution.’ Declaring the PM’s conference revolutionary tells you everything you need to know about the desperation that is gripping the Tory party a year ahead of the next General Election. ‘Common sense’ seems like the last tiered right-wing trope the Tory party resorts to try and convince voters that somehow they speak for the ‘common man’.

Nastiness as manifesto pledge

What shocks me most about the decline of the conservative party is the sheer nastiness of most of the speeches and policies that were presented at CPC23. The various CPC23 speeches did not set out any grand plan to get the country back on track. The Tories under Sunak, Mordaunt, Patel, Truss but especially Braverman promise the country only one thing: nastiness. Nasty to immigrants, nasty to the woke, nasty to civil servants, nasty to academics, nasty to ‘non-aligned’ journalists...  As such, CPC23 has made very clear a trend I have written about months, ago, namely that the Tories have turned into the ‘deliberately nasty party.’

How did we end up with a political culture where nastiness is not perceived as a liability anymore, but as an electoral asset?

I think there are (at least) two parts to the answer: Firstly, right-wing populism that brought us Brexit needs divisiveness – us versus them-thinking. To achieve this, people in this country have been fed populist nonsense about the existence of a detached ‘liberal elite’ (which Goodwin now tries to turn into a scientific theory – see my take on his ‘theory’ here). This populist ideology – that Chris Grey calls ‘Brexitism’ – relies on a reversal of ‘virtue and sin’ – what used to be considered democratic virtues is becoming ‘luxury belief’ that only privileged people in good jobs and living in metropolitan areas can afford to hold. This reversal of values advocates for the superiority of ‘common sense’ over expertise; of gut feeling over reason; of your personal opinions over society’s norms. This has led to a situation where people feel they have a right ‘to be themselves,’ i.e., to disregard any rules of morality, self-restraint, and human decency that are so crucial to peaceful societies. This ‘right to transgression’ means people claim the right to broadcast their opinions – however badly informed – unfiltered to the world. The right to think, say, do whatever you want without regard for anyone else. The right to be nasty is part of that and has hence become a selling point not a liability for the Tories in their current shape.

The second part to the answer is that the Tories believe that this ‘right to transgression’ is what working class people – who they consider crucial to electoral victory next year – want. The ‘Red Wall’ has become a key battle ground between Labour and Conservatives; and nastiness is how the Tories think it can be won. Lee Anderson plays a crucial role in that strategy. He is the Tories most mediatised claim to a connection with the working classes. A former coalminer who now is deputy chairman of the conservative party seems the perfect public figure to show the relevance of the Tories for Red Wall voters. I have written this before: To me Lee Anderson is the ultimate Tory insult to working class people. The fact that the Tories believe Anderson can win them the Red Wall votes implies that Tories think working class voters are like Lee Anderson: Crude, cruel, and contrarian.

Of course, there are working class people that think and behave like Anderson – but they certainly are not the majority. He does not represent what working class people stand for, but rather what Tories think working class people are like. Appointing Anderson as deputy chairman of the conservative party and now GB News presenter does not mean working class people are being given a voice. Rather, it means the caricature of an insulting stereotype of working-class people is being given a platform, which may very well reinforce that stereotype and enable those working-class people who are like Anderson – again not the majority – to loudly claim their right to transgression. Anderson may become a self-fulfilling prophecy reinforcing enabling and encouraging the nasty far-right part of the working classes. GB News is key to that prophecy becoming a reality.

GB News says in its mission statement that they ‘want to give a voice to the real Britain.’ Ironically, if you take that statement seriously and look at who is being given a voice on GB News – including not just Anderson but other sitting Conservative MPs Jacob Rees-Mogg, Philip Davies and Esther McVey – not exactly ‘salt of the earth’ type of people –, the ‘real Britain’ apparently is that part of the establishment that most vocally denies reality. Meanwhile, the ‘unreal Britain’ is being drawn into the mud of debased British politics and forced to fight a ‘culture war’ with reality denying conspiracy theorists rather than working towards solving the country’s very real problems.

For me, one of the key attractions of horror movies is that you get an adrenaline kick from the fright, but when you switch off the telly you get the reassuring feeling of returning to a perhaps somewhat boring but relatively safe reality without monsters and zombies. Switching of the telly after the CPC23 should not leave anyone under that illusion. The ghosts that the Tories called on their descent into madness are very real and will haunt us for a long time.

Brexit Impact Tracker – 24.9.2023 – A Tale of Two Brexits

Much has happened in British politics since my last post in early July, making a return to Brexit blogging somewhat daunting. Yet, having followed British politics from afar for a few months does have the merit of making it easier to focus on the bigger picture rather than being bogged down – as I sometimes am – in the details.

The bigger picture, it seems to me, is that just like Schrödinger’s cat, Brexit now seems to be dead and alive at the same time. The analogy between Brexit and Schrödinger’s famous thought experiment – in which a cat in a box has to be thought of as being simultaneously dead and alive – has been used many times especially during the Brexit negotiations (e.g. here). But it seems to me, that the analogy about the dual state of Brexit has gaining a new meaning in recent months. This is illustrated by the fact that the increasingly used term ‘Brexit 2.0’ is used in two different ways. On the one hand it is used to describe the next frontier that the British hard right’s political project is now turning towards, most importantly exiting the European Convention of Human Rights (ECHR).

The other sense in which the phrase ‘Brexit 2.0’ is used concerns the additional disruptions to EU-UK trade that will result from increasing divergence of EU and UK rules resulting not so much from a conscious strategy of divergence, but rather from the fact that the EU introduces new rules, which the UK as a non-member now does not follow anymore. Most importantly, new EU rules coming into force in the next months and years concerning a carbon border tax, the implementation of plastic packaging rules, and – further down the line –supply chain due diligence laws will create considerable additional costs and red tape for UK businesses exporting into the EU.

The first meaning of the phrase then refers to the ‘political Brexit’ (Brexit as a political project), the second to the ‘technical Brexit.’ While the second is very much alive and kicking – i.e., it is ongoing and largely unresolved from the perspective of the companies concerned –, the former is dead and being superseded by new political ‘wedge issues.’

Dealing with technical Brexit

Chris Grey has labelled the Tories’ strategy of dealing with the concrete problems caused by technical Brexit ‘pragmatism without honesty.’

This pragmatic approach includes different tactics. The first one is to simply not use the ‘Brexit freedoms’ that Brexiters previously extolled. The most striking – and for Brexiters probably humiliating – example perhaps is the decision to indefinitely postpone the introduction of the UKCA quality mark for UK goods and instead continue to – unilaterally – use the EU’s CE mark.

A second, increasingly frequently used, strategy is to undo some of Brexit. Here the decision to rejoin the Horizon scientific programme constitutes a striking example. Another ones is the plan to rejoin the EU border agency Frontex in order to tackle cross-Channel migration.

Finally, in other areas Brexiters are still clinging on to pipedreams such as the conclusion of allegedly game-changing Free Trade Agreements with far away countries. This strategy works to the extent that the conclusion of such agreements can be turned into positive headlines, while the negative impact of the deals (concluded in a rush and under political pressure) will take some time to materialise and become evident to the British public.

Overall, this multi-pronged tactic does not amount to a coherent long-terms strategy to fix technical Brexit. Sunak’s pragmatic approach seems opportunistic and dictated by the internal and external political pressures he is under at any given day. This leads him at times to make concessions to the EU (e.g. when he agreed to the Windsor Framework); at times placating the Eurosceptics in his party, e.g. when rejecting the EU’s offer to establish a strategic dialogue with the UK. For businesses, this approach is expected to mean more of the chaos we have seen since January 2021.

Dealing with the death of political Brexit – In search of new ‘wedge issues’

Like any right-wing populist movement, the right-wing fringe of UK politics thrives on division. In fact, the ‘us versus them’ rhetorical strategy is their most powerful tactical weapon to rile up enough supporters against ‘the other’ and garner electoral support. It is no surprise, then, that as political Brexit has all but lost its potential to divide the nation, new political wedge issues need to be found.

Indeed, the view that Brexit was a mistake is now firmly established in the British public with nearly a 2-1 majority thinking it was wrong to leave. Even when asked the more controversial and consequential question of whether people would vote to rejoin or vote differently in a re-run of the 2016 referendum, the join/rejoin/remain side tends to have a clear lead (varying between 10 and 25%) over the leave/’stay out’ side in virtually all polls (although the picture may be more complicated if the ‘don’t knows’ are taken into account). As a result, political Brexit simply has lost its potential as a political weapon.

Little wonder then that the ‘great dividers’ on the hard-right are desperately looking for a new ‘retractor’ that can keep the gaping wound of Brexit open until after the next General Election. The European Convention on Human Rights (ECHR) has been their first choice for a long time. Given that the ECHR court sits in Strasbourg and in many people’s minds is barely distinguishable from EU institutions, it has the great advantage of tapping into the same Euroscepticism that has been nurtured by the hard-right since the 1970s at least and that eventually brought us Brexit. It also has potential as a populist wedge issue between the people and the elite, because of the role of ‘foreign judges’ in implementing the ECHR. Anti-judiciarism has always been a core strategy of Brexiters and other populists not only since the infamous ‘enemies of the people’ headline in the Daily Mail. Attacking the ECHR and the European Human Rights Court allows Brexiters to carry over some of the hatred and populist tropes onto a new battle ground. Finally, the attack on te ECHR is also the perfect substitute for Brexit, because it neatly links with the right-wing populists’ core issue: Immigration. Indeed, given the ECHR’s role in trying and protect the basic human rights of those who desperately seek to reach Britain’s shores, it is easy to portray the Court as the key reason why Britain ‘cannot protect its borders.’ Human rights lawyers and judges objections to inhumane schemes like the Rwanda plan – whereby people would be flown to a remote country at great expense to the taxpayer – or to the plan to house asylum seekers on unsafe boats – constitute ideal targets for populists who claim that we need simple and drastic solutions to the problem of immigration. The ECHR is the perfect scape goat for the current governments’ failure to deliver on its promise to ‘stop the boats.’

Like in other cases, we are being told the problem – made worse by Brexit and the related exit of the UK from the Dublin regulation that allows countries’ to send back refugees to safe first countries of arrival – is not too much Brexit, but not enough Brexit. Hence, the need for Brexit 2.0.

The attacks on human rights from the far right inside and outside the Tory party will probably ebb and flow over the coming months and years, but it is unlikely that they will go away complete. The failure of political Brexit makes it certain that the anti-ECHR’s strategy will remain an important lifebelt to keep the former Brexiters’ right-wing populist political project afloat.

Uxbridge and Ecoscepticism

Over the summer, however, a second substitute for political Brexit has emerged, namely net zero and environmental protection in general. The reason for this alternative to emerge was the fateful Uxbridge by-election, which the Tories won thanks to a simple but effective NIMBY (not in my backyard) strategy. The Tories focussed on attacking Labour over the Labour Mayor of London’s ultra-low emission zone (ULEZ) policy. The election was decided on the finest of margins: 515 votes separated first placed Conservative Steve Tuckwell from Second place Labour candidate Danny Beales (with third placed Green Party candidate Sarah Green taking a decisive 893 votes– illustrating once again the importance of pre-election strategic voting and alliances). Still, the conservatives smelled blood and spent the rest of the summer developing an anti-environment strategy that they probably see as their best hope of averting a seemingly inevitable electoral defeat at the next General Election. Consequently, this week PM Sunak announced a U-turn on various net-zero targets and policies claiming to care about the costs these would impose on ‘ordinary people.’

The short-sighted anti-environment stance may indeed make some political sense, given that some polls show that as many as 46% of people say that they would oppose climate change policies if they have a negative impact on personal finances. However, it is unclear how much potential this strategy really has. On the one hand, it fits well with recurrent – but so far less systematic – attacks conservatives have dished out against climate activists like Extinction Rebellion, Just Stop Oil or more broadly what they call the ‘anti-growth coalition.’ It also seems like a logical move closer towards climate change denialism, is in line with the conservatives increasing proximity to the US-style NatCon ideology. The NatCons flagship channel GB News, for instance, seems already far down the black hole of climate change denial. At the same time, some commentators are doubtful that anti-environmentalism can provide a path to electoral victory, given that the British public is quite strongly supportive of climate action.

The anti-environment strategy may also backfire because of the sewage crisis, which voters seem to care strongly about and which may turn even Tory voters away from their party. In a context where the pollution of British rivers, lakes, and the sea is making international headlines (e.g., when more than 50 athletes fell ill during the triathlon world championship due to high levels of E-coli in the water), being the anti-environment party may generate a backlash against conservatives in many constituencies. Indeed, British voters may not be willing to trade off clean water for affordable houses, but rather will vote for a party who promises both.

Be that as it may, the anti-human rights and anti-environment strategies prove that political Brexit is dead, and the conservatives are actively trying out new wedge issues to divide the electorate and stay in power. However, the death of political Brexit also means Labour and other opposition parties have got more leeway and new options.

Nixon goes to China – Starmer goes to The Hague

On this blog I have often been very critical of Starmer’s strategy and policies since he has become Labour leader, e.g. here. In particular, I have my doubts about Labour’s eagerness to quickly draw red lines, e.g. in terms of customs union or single market membership, or when ruling out a wealth tax. I often feel Labour could afford to be less categorical on such issues to leave more flexibility in case of a GE victory. I also worry that these red lines often replicate the conservative programme too closely, creating the impression amongst voters that there is not much daylight between the two parties and hence no real electoral choice available – possibly increasing absenteeism.

Yet, in the current context of the death of political Brexit, I can see a positive side to Starmer’s ‘red-lines strategy.’ Being categorical on certain policy issues may create political cover that Starmer now can exploit to fix technical Brexit.

The phrase ‘Nixon goes to China’ – coined in the context of Nixon’s 1972 visit to communist China – has come to mean that only a politician whose ideological credentials are beyond doubt can negotiate with an ideological suspect and controversial counterpart. Only Nixon – a staunch anti-communist – could fly to China and meet with Mao Zedong without being suspected by the US public of cosying up or selling out to the communists.

Starmer – as a ‘lefty lawyer’ and ‘Remainer’ – will always be suspected of ‘betraying Brexit.’ Here, his clear stance on rejoining or single market and customs union membership may create the image of a ‘hardliner’ in terms of Brexit. This may increase his ability to become bolder on fixing technical Brexit.

Last week, Starmer went on an international tour, meeting among others with Canadian PM Trudeau and French President Macron, but also visiting The Hague to discuss with officials from the EU’s law enforcement agency, Europol, Labour’s migration policy. That is a remarkable and bold move for a party that has been struggling to find an effective response to the Tories’ anti-immigration strategy. ‘Smash the gangs’ seems like a promising three-word rhetorical response to the Tories ‘stop the boats’ slogan, which links to Starmer’s credentials as human rights lawyer, while also allowing the Labour leader to talk tough on crime without criminalising asylum seekers themselves, which may put off Labour’s core voters.

Of course, the right wing press still accused the Labour leader of turning Britain into a dumping ground for unwanted migrants. But clearly, Labour feels confident enough to take the immigration policy fight to the Tories. Something they have been hesitant and unable to do effectively for years. This is a result of the Tories weakness and of the death of political Brexit. It shows that a space is opening up to address some of the problems Brexit has created or worsened. Starmer’s announcement to seek a major rewrite of the Trade and Cooperation Agreement (TCA) as well as his commitment to non-divergence from EU food, labour, and environmental standards illustrates this further.

It can be expected that Labour will become bolder still on Brexit, simply because the British public and especially Labour voters – even in the leave-voting Red Wall seats – are increasingly Brexitsceptics. The right-wing presses’ cries of ‘Brexit betrayal’ will simply stop having any effect as fewer and fewer people in the country care about or for Brexit. Labour may also be further emboldened by the risk that the LibDems discover there may be electoral gains to be made from adopting a bolder pro-EU stance.

The government’s attacks on human rights and environmental protection are very regrettable and worrying. However, the silver lining is that now that political Brexit is dead and the NatCon madness is turning on human rights and climate change mitigation, Labour can start to develop a bolder strategy to tackle the many problems caused by technical Brexit.

Brexit Impact Tracker - 3 July 2023 – The Price of Pride

Over the past fortnight, Britain has been marked by two important Brexit-related events: The (temporary?) political demise of Boris Johnson and the seventh anniversary of the Brexit referendum.

The downfall of one of the most crucial figures in the Brexit saga so far, former Prime Minister (PM) Boris Johnson is potentially a very important event not just in terms of Brexit, but even more so in terms of the future direction of the conservative party, and British politics in general. Johnson resigned from Parliament due to his anticipated suspension from the House of Commons following the Privileges Committee report on ‘Partygate.’ Johnson’s behaviour in relation to the parties held at Downing Street during the national lockdowns was deemed grave enough by the Tory-dominated Privileges Committee to warrant a 90 days suspension from the Commons. Such a long suspension could have triggered a byelection in which he could have lost his seat. He avoided that fate by resigning. Johnson allies Nadine Dorries and Nigel Adams also announced their resignations in solidarity with Johnson and in protest of the Committee’s work, although – as of two days ago – Dorries still does not seem to have followed through on that.

Johnson’s resignation from parliament more or less coincided with the publication of his resignation honours list as a PM. The list contained, among others, 29-year old Charlotte Owen – whose only notable achievement seems to have been to have worked as Johnson’s aid for a few short years – and people who have since been spotted on an appalling video of one of the lockdown parties that The Mirror obtained. Together, with Johnson’s puerile reaction to the report – calling the privileges committee a ‘Kangaroo court’ and apparently trying – together with his closest allies – to pressure its members before the publication, the debasement of the offices of PM and of MP by Johnson seems to have culminated in a dreadful grand finale.

That is not to say, of course, that Johnson will not try and stage another comeback. Nigel Farage himself had floated the possibility of an alliance with Johnson to form a new right-wing party. Such an alliance may always have been a very long shot, given how different the two are both in terms of substance and ideology. It has become even less likely now that another bizarre story is unfolding involving the former UKIP leader. Last week, Farage tweeted about his UK bank having closed his accounts. Reportedly, the bank in question is Coutts – which has drawn mockery given Farage’s ‘man of the people’ image. Farage himself sees the move as punishment by the ‘establishment’ and the ‘corporate world’ for his role in Brexit. A more likely explanation is that some of the financial transactions involving Farage’s accounts may be under investigation. Indeed, the description of what has happened that Farage provided in his video seems fairly consistent with what the bank might do if it followed the procedure under the Criminal Finances Act and the Proceeds of Crime Act that prohibit the banker from given account holders the reason for accounts being frozen (rather than ‘closed’). In the coming weeks and months, we will certainly hear more about what exactly happened to Farage’s finances, but for now it seems like he may be in considerable trouble himself and hence not a great ally to launch a new right-wing party with.

In the meantime, Johnson has taken on a job as Daily Mail columnist – very fittingly breaking ministerial code in the process – thus stating once more very publicly his contempt for the British political system, its conventions, and the rule of law.

The struggles of the two major figures of British right-wing populism are reflective of the state of their project as a whole, which was illustrated two weeks ago by the reporting and commentary on the seventh Brexit referendum anniversary.

Sore winners

The Brexit Referendum anniversary on June 23rd was marked by the now customary schizophrenic messaging from Brexiters who are torn between blaming others for the failure of Brexit to deliver on its promises and claiming that Brexit has provided all sorts of benefits. A representative of the latter group was Johnson who celebrated the referendum anniversary with a Tweet that nicely summarised the main Brexiter lies about Brexit benefits. The benefits he lists are Free Trade Agreements (FTAs – see below) and a ‘bold’ new foreign policy including in the Pacific and Ukraine. He concludes that Brexit has ‘paid off and will pay off hugely as time goes on.’ Like a broken record he still refers to the vaccine roll out as a key Brexit benefit. Even if the quick vaccine roll out had only been possible thank to Brexit – which once again it has not –, the government still botched the Covid response leading to the sixth highest death rate in the world and the highest in Europe. The Covid inquiry starts showing this in brutal detail. The UK’s Covid response is not a policy that the UK government should be proud of.

Johnson’s on insanity bordering optimism is increasingly the minority view among Brexiters though. Much more common now is the other reaction: finding others to blame for Brexit not having delivered anything positive for the country. As Chris Grey argues, this has led to an obsession among Brexiters with attacking Remainers rather than boasting about having delivered on Brexit promises. Rather than celebrating the 7th anniversary of their ‘Independence Day,’ with Vote Leave style-videos that show everything that has improved since Brexit, Brexiters spend their days sneering about how Remainers got this, or that prediction of negative impact wrong and that therefore Brexit was a success and Remainers see themselves ‘humiliated.’

It is – of courses – inherently absurd to benchmark Brexit against the most pessimistic predictions made by those who lost the referendum rather than against the promises of those who won it. But given that none of those promises have come true, one can understand why Brexiters have to resort to this strategy.

There may, however, be a deeper reason for this strategy too. If we wonder counterfactually whether Brexiters’ attacks on Remainers would be less vitriolic had Brexit gone well and were it delivering on all – or at least part of – the fantastic promises that made people vote for it. Say, net immigration were down; or an FTA with the US that significantly uplifted UK trade had been signed. Perhaps then, Brexiters would be less sore winners and work towards uniting the country behind their great project?

Perhaps. But somehow, I doubt it. In fact, the spiteful attacks on Remainers are not an unfortunate and avoidable by-product of the Brexit project. They are at its very core.

Prof. Grey rightly notes that ‘You can hardly recruit converts to your cause by insulting and humiliating them.’ As such, the sore winner strategy Brexiters increasingly resort to makes not much sense. But that is looking at it from a ‘civic minded’ point of view of someone who believes the country should be united, divisions and hateful attacks avoided, and policies be geared towards promoting some notion of democratically agreed-upon public good. None of these views are held by the political entrepreneurs who made Brexit their vehicle. They do not want to recruit converts beyond the number necessary to stay in power. To the contrary, they are desperate to keep the divisions open and the wounds sore that Brexit has inflicted on the country. In fact, if everyone were to rally behind their project, they would lose the most important fuel that drives their political ambitions forward: hatred of ‘the other.’

Like any exclusionary populist ideology, Brexitism crucially relies on a Schmittian understanding of politics as the opposition of friend and enemy – rather than of the peaceful co-existence of groups with legitimately diverging opinions within a liberal, pluralist society. For Brexiters, Remainers are ‘the other’ – the ‘enemy within.’ Now that Brexit is done, the main ‘enemy without’ – ‘Brussels’ –, while still useful in some instances (‘EU punishment’), is not as readily blamed for everything that is going wrong in the country. Therefore, it has lost some of its potential to mobilise support for Brexitism. Similarly, blaming ‘immigrants’ continues to play an important role in Brexiters’ political mobilisation strategy (‘stop the boats!’); but increasingly it is a risky strategy given that focusing on immigration also underscores the Tories’ failure to deliver on one of their most consistent policy promises – to bring net migration down. Here, of course, others can be found to be blamed – namely judges and the European Court for Human Rights (ECHR). But beyond all of this, having a large number of internal enemies – variously identified as ‘the establishment,’ ‘the blob,’ ‘the civil service,’ ‘academics,’ etc., etc. is a true bane for Brexiters that helps them fan the flames of discontent and hatred.

Therefore, we should not expect the period until the next Brexit anniversary to see a healing of wounds. As long as Brexiters are in – or close to – power, the division and hatred will continue. Brexiters’ interest is not solving the countries pressing problems or making the average person’s life better – their interest is purely and simply staying in power – and for that they need people to be angry and frustrated.

As such, while in socio-economic terms Brexit increasingly clearly looks like a failure for both Brexiters and Remainers, in political terms it has delivered and keeps delivering for Brexiters. Not in the sense that ‘Brexit’ per se will remain a politically viable tool to mobilises political support – the polls clearly point in the opposite direction; but in the sense that it has created deep divisions and hatred on which exclusionary populists thrive. It is therefore unlikely that they will stop bashing Remainers as quasi-religious fanatics and the like. If they did, their political business model would stop working. Instead, they will move on from Brexit and find other divisive issues to capitalise politically on. The most important example is the European Convention for Human Rights, which it is rumoured may become the next object for a Brexit-style referendum campaign to rip open any scar tissue that may have started to form over the Brexit wounds.

Pride and preposterousness

The political capital Brexiters accumulate by dividing society is one reason why Brexiters continue to deny the very real economic price we are all paying for their project. To some extent, the damage is good for Brexiter political entrepreneurs, because it further increases popular frustrations that can be turned into political mobilisation for their far-right political project. Yet, outside of the political entrepreneurs who made a career out of Brexit, another reason for Brexiters’ inability to acknowledge and start addressing Brexit damage is pride. As I have argued before, ultimately Brexit is also the result of a superiority complex and misplaced nationalist pride. People afflicted with these ailments may still actually believe the evidence on Brexit damage to our economy is not real.

Graham Gudgin is one of the most outspoken defenders of Brexit and relentlessly criticises macro-economic modelling of Brexit impact on GDP growth. Johnathan Portes nicely summarises the state of the debate on the UK in a Changing Europe web page. The short version is that Gudgin and his co-authors attempt to discredit the most sophisticated econometric method economists like John Springford are currently using to assess the impact of Brexit compared to what would have been without Brexit. Gudgin’s strategy essentially consists in criticising the complexity of Springford’s methodology – the synthetic control method (SCM) – and the lack of ‘transparency’ of the algorithms it uses to weight the variables that are included in the estimation. Instead Gudgin and colleagues propose simpler, more intuitive methods to assess whether Brexit has had a negative effect. In their latest working paper, an alternative method proposed is the Error Correction Model (ECM). However, that method does not generate substantively different results – but rather confirms that the UK substantially underperforms compared in terms of GDP growth compared to what would have been expected without Brexit (see table on p.12 of their working paper). As a result, other explanations for these unacceptable results need to be found. The key one provided in Gudgin and Lu’s paper is the fact that these underwhelming results are mainly due to the US’s ‘overperforming’ due to expansionary fiscal policy.

Economists like John Springford (here) and Jonathan Portes (here) are certainly better placed than me to defend the SCM and the results it generates. Here, I just want to note the more general issue with ‘populist economics,’ which I have written about before (here). Fundamentally Gudgin and other pro-Brexit economists apply to econometric analysis the same populist anti-expert, common sense attitude that they apply to any policy problem. Thus, Gudgin and Lu argue for a counterfactual that uses only three countries rather than the 22 that Springford included. In a strange populist variation on Occam’s razor, the argument seems to be what is simpler, is easier to understand, and hence closer to the truth.

The search for simplicity leads to another parallel with populist political discourse, namely the claim that we can go back to a simpler reality from times gone by. Portes notes that the alternative – in their view superior – method Gudgin and Lu advocate ‘might perhaps have been standard a decade or so ago,’ but has now been superseded by what experts consider superior, more complex methods. It is that complexity that Brexiter economists – not just Gudgin but also Patrick Minford, Julian Jessop and others – are fighting against like Don Quixote against the Windmills.  

Their hatred of complexity and yearning for simple solutions is what has inspired much of the Brexiter movement. The basic populist idea that underlies this attitude is the idea that common sense is superior to technocratic expertise and the assumption that any issue – however complex and intricated in reality – can be reduced to a simple, straightforward problem that has a clear solution dictated by common sense. The reason why we are not seeing this simple solution implemented is that elites either benefit personally from not doing so or choose not to do so for ideological reasons. Gudgin applies this reasoning to economics, just like Brexiters like David Frost, Jacob Rees-Mogg and many others apply it to ‘sovereignty,’ ‘democracy,’ and ‘free trade’…

Free Trade

Related to free trade, another example of populist Brexiters yearning for reality-defying simplicity came in the form of Trade Secretary Kemi Badenoch’s speech about international trade. During the launch of a new e-commerce trade commission, Badenoch stated that all that was needed to boost UK exports was a ‘change in perception’ away from negative tropes towards an understanding that international trade ‘isn’t too tough.’ The Institute of Directors and the London Chamber of Commerce and Industry both criticised these remarks; the latter urging the Trade Secretary to focus her energies on solving the actual problems exporters are facing – including new trade barriers imposed by Brexit.

Badenoch’s statement that trade is simple very much chimes with Brexitism’s claim about common sense being enough to run the country and solves its complex problems. Yet, it also illustrates another Brexiter truth, namely that all that is needed for Britain to solve its many problems is a strong enough belief in its greatness. Chris Grey noted this week that ‘amongst the more cult-like Brexiters there is the sense that [belief] means something like ‘faith’, in a quasi-religious way, such that reality will bend if faced with a sufficiency of it.’

While the UK trade secretary attempts to convince UK exporters that thy need to believe harder in their ability to export, the EU announced its own free trade agreement with New Zealand. The conclusion of this FTA comes during the same month as the UK’s own deal with New Zealand entered into force. No doubt, Brexiters will boast about ‘nimble Britain’ having done a deal more quickly outside the EU than the EU behemoth. Yet, in international negotiations, speed is not necessary a good thing. Economic bargaining power theory tells us that in a bargaining situation, those actors have more power who can afford to be patient. In their desperation to fabricate Brexit benefits, Brexiters were quick to conclude any FTAs that were politically feasible; and they were willing to do so on literally any terms offered by the partner country – inflicting – in the process - an astonishing cost on the country.

Both the Australia and New Zealand FTAs are mainly remarkable not in the sense that Britain was able to conclude them relatively quickly, but rather in the huge price British farmers will be paying for Tory glory. The National Farmers Union has long criticised these deals for opening up almost completely the UK market to imports from Australia and New Zealand while offering nothing to British farmers. In contrast, the EU has negotiated a deal that seems to protect its farmers to a much greater extent than what the UK government has done. To be sure the EU farmers union too is unhappy about the further opening up of EU meat and diary markets to NZ imports, but equally New Zealand’s counterpart considers the deal not going far enough, which may indicate the EU and NZ landed somewhere in the middle, where the UK accepted nearly complete market access. For instance, in exchange for reducing barriers to imports from New Zealand, the EU obtained the agreement that protected names such as ‘Feta’ cheese could not be used by New Zealand’s farmers anymore, thus providing protections to EU farmers.

The price to pay for pride

All that said, I increasingly feel arguing about the macroeconomic impact of Brexit is futile. The evidence will become clear enough when we have longer time series. In the meantime, we simply cannot afford arguing about the macroeconomic impact of Brexit when all alarm bells should go off based on what companies small and large say the impact of Brexit on their business is. Even if Brexit had not impacted UK GDP yet, it is as certain as night follows day that it will, given how business experience it. Indeed, the Bank of England itself forecasts now that the UK economy will not grow at all until 2026. This is the price we are paying for Brexiter nationalistic pride.

Regulatory divergence

The British pride to be able to ‘do things differently’ or ‘our own way’ comes at a high price. Rather than Britain using its newfound ‘independence’ to do things better, so far, the British government has rather behaved like a child in its terrible twos. It does not matter whether the outcome is worse than if we did things in cooperation with someone else or by following EU rules. We want to do them ourselves, in our own way. Just like a two-year old who insists on cutting the food on her plate herself – even though the outcome will be a terrible mess – so the UK government wants its own rules. In the process, regulatory divergence from the EU – after FTAs – risks becoming the next Brexiter fetish that is valued by Brexiters for its own sake rather than for any superior outcomes it might produce.

Diverging from the allegedly overbearing EU ‘red tape’ was indeed one of the most often cited argument for Brexit and promised post-Brexit. Yet, companies operating in Britain and the EU are not pushing the government to deregulate, but rather are urging the UK not to diverge from EU regulations, as this reduces their costs of operating across borders.

Opportunity costs

Another, more subtle, way in which Brexit has cost the UK has been brought to light once again during the Covid19 inquiry. Former Health Secretary admitted to the Covid inquiry that one of the reasons for Britain’s unpreparedness for the pandemic and its high deathrate was the distraction caused by preparation for no-deal Brexit. Indeed, he had signed off a decision to ‘re-allocate departmental resources from pandemic preparation to no-deal Brexit preparation.’ This is a very important example of the type of indirect opportunity costs of Brexit that remain largely hidden from public sight. Indeed, Brexit costs us not only directly by reducing trade and economic activity, but also indirectly in terms of what else the British government could have done with the massive amount of time and resources that went into preparing for, implementing, and now dealing with Brexit.

Inflation

The by fare highest price that Britons pay for Brexit pride, however, is the staggering rise in mortgage payments due to the Bank of England’s stubborn anti-inflationary policy that has led last week to the 13th interest rate hike in a row. Interests now stand at 5%. Back in May, the Resolution Foundation estimated that even at 4.5%, British Households would be paying an additional £12bn in mortgage payments. That money will lack elsewhere, lead to lower household disposable income and spending, and is now forecast to lead to a recession in Q4 of 2023 and Q1 2024. The latter is indeed the intended effect of the BoE’s orthodox approach to inflation: By reducing demand, it is hoped prices will come down too. Much has been written and said by experts like Danny Blanchflower or Richard Murphy about the flaws in the BoE’s doxa – most fundamentally that we are not in a demand-driven inflationary phase but in a supply shock one. To cite a source that has no skin in the Brexit game and no horse in the Leavers-versus-Remainers race – the Australian Financial Review cites the Canadian investment bank TD Securities explaining why the UK is facing higher, more persistent inflation, and lower GDP growth (these are taken as facts not hotly debated political issues) than other G10 countries:

“The simple explanation for this [is] that the country underwent a unique adverse supply shock in the past few years that no other country faced. While monetary policy can’t offset the impact of Brexit in the longer-run, the short-run impact requires a policy offset, and is something that policymakers in this country have generally refused to acknowledge. This hesitation to face such a deep structural shock means that the UK is slipping behind in its fight against inflation.”

The UK policy makers refusal to acknowledge the impact of Brexit means the BoE’s Andrew Bailey needs someone else to blame. Unsurprisingly, he turns on trade unions and working people’s wages to explain the persistent inflation. That argument is nonsense, but PM Sunak clearly is convinced suggesting he might block public sector pay raises in the name of fighting inflation. Long past are the days where we were promised Brexit would lead to a reset of UK labour markets and bring us a high wage, high skills, high productivity economy. Now, all Brexiters can promise is years of economic pain and declining living standards.

Insane optimism versus surrendering to reality

Brexiters are very optimistic people. None incorporates their reality-defying, insanity-bordering optimism better than Boris Johnson. In his referendum anniversary Tweet, Johnson urged his followers not to listen to the ‘prophets of doom’ and to instead ‘believe in this country and what it can do.’ Reality should not stay in the way of that belief. If reality is not as rosy as Brexiters promised it would be outside the EU, then that is probably due to the fact that we have not believed hard enough, that someone is working in the background to sabotage the project, or that it takes time for our belief to transform into sunlit uplands.

From that perspective, reality becomes the enemy and anyone advocating a realistic approach becomes a traitor. The Express decries any notion of showing pragmatism in our relationship with the EU as an act of ‘surrender to the EU.’

To be sure, I am not advocating to accept Thatcher’s TINA – ‘there is no alternative’ – approach to economic – or any other – policy making, that suggests countries’ do not have a choice but follow the current doxa. There are always alternatives, and indeed the world is in desperate need of alternatives to the failed social and economic policies of the past four decades or so. What I am advocating though is that any alternative needs to start from reality – not defy it – and be based on a serious analysis of the situation, the likely impact of its implementation, and possible costs for a wide range of people.

It is beyond ironic that Brexiters – the noisy advocates of a ‘common sense’ approach to solving complex problems and the enemies of experts – are so stuck in their ideology that they cannot be pragmatic about things like regulatory alignment with one of the leading regulatory regimes in the world.

As soon as Brexiters are removed from power, a new, less ideological government will find it difficult to resist the temptation to spur on our flailing economy by simply doing the logical and pragmatic thing. This is all the more the case that outside the right-wing media and Brexiter bubble, fewer and fewer people still want to stay outside the EU. So, there is a glimmer of hope there.

This is the last BIT post before the summer. The next two months will imply a lot of travelling and some holidays for me. I will be back with regular posts in September. Happy summer dear readers!

Brexit Impact Tracker – 18 June 2023 – Brexit Britain: Between Budapest and Bern

Over the next two to three years, Brexit Britain will be at a crossroads twice: There will be a General Election (GE) before the end of 2024 and the Trade and Cooperation Agreement (TCA) with the EU – that Boris Johnson negotiated in haste – will become up for review in 2026. The outcome of both these events will be crucial in setting the country either on a path to recovery from over a decade of economic and political chaos and turmoil or could – instead – see it further decline.*

Can the next General Election stop illiberalism?

Regarding the first crossroads, who wins the next GE is an as high-stakes political issue as there can be. The Tory party is drifting ever further to the right – including – paradoxically in my view – most recently in reaction to the local elections, which did not lead to a rebalancing of the party to the centre-ground, where clearly the British public are, but to an attempt by the so-called NatCons to push it even further to the right. A defeat by current party leader Sunak in the next GE may very well push the party over the edge into US Tea Party territory. But even if Sunak were to win, the influence of the NatCons will not go away, suggesting that the hard right will continue to dictate Tory policies in case of another five years in power.

This would probably imply that the party would continue to undermine British democracy and quite possibly destroy it for good. No doubt, some readers will feel this is too alarmist a view. Yet, I have written this many times before: Anyone who has closely followed the developments in Turkey since 2003, in Hungary since 2010, and in Poland since 2015 will be shocked by the similarities of the Tories’ approach to democracy and that of Erdogan, Orbán, and Kaszynski.

Brexit was sold to the people as a moment of renewal and independence, that would lead to deregulation, lower taxes, more economic growth. Yet, as I wrote in my last blog, what we have seen so far is not more, but less freedom. The illiberal policies include the attack on the Electoral Commission, the independence of the judiciary (under the new Judicial Review and Courts Act), and the voter ID legislation, which senior Tories admit was an attempt at voter suppression.

Therefore, the next election is about more than whether we get more market- or state-centric economic policies or more liberal or conservative social policies. It is quite possibly about whether the illiberal tendencies will be allowed to continue and thus continues on its path towards Budapest-on-Thames.

Another piece in the illiberal Brexiter puzzle has made the headlines this week: The Public Order Act, which limits freedom of speech by giving police sheer unlimited power to crack down on people protesting and makes possible harsh penalties for very minor public order offences.

Green Party Baroness Jenny Jones introduced a so-called ‘fatal motion’ in the Lords, to try and stop a piece of secondary legislation related to the public order bill, which changes the definition of ‘a serious disruption’ to ‘anything more than minor’ thus further restricting the right to protest. Shockingly, Labour decided to abstain when the motion was put to the vote in the Lords this week. Emily Thornberry tweeted in defence of that decision suggesting it would be undemocratic to kill a bill in the unelected House of Lord. Yet, as Peter Stefanovic explains, this is a bad faith argument at best, as the fatal motion was directed against secondary legislation that tried to reintroduce into the bill elements that the House of Commons had voted against. While the Tories assault on British democracy is shocking, even more shocking is Labour’s complicity.

Still, Labour’s hesitance to stand up for democracy may change after the GE. It seems clear that the reason why Labour has decided to accept Tory legislation that restricts our rights to protest, is because the party has been scared into a state of paralysis by the Tory party and the right-wing press. Thornberry’s explanation that the Labour party is afraid of Tories blocking legislation in the Lords in return, shows just how vulnerable and weak Labour feel after 13 years in opposition.

More specifically, the illiberal anti-protest laws that the Tories have adopted are arguably mainly targeted at Just Stop Oil (JSO), Extinction Rebellion, and other environmental organisations protesting fossil fuels. Here, the emerging narrative that Labour is somehow captured by Just Stop Oil – a claim mainly based on the fact that green energy entrepreneur Dale Vince has donated to both JSO and the Labour party – seems a worry for Starmer. By refusing to commit to repealing this legislation, Labour clearly wants to avoid providing any further oxygen to that line of attack. It is to be hoped, that in case Labour were to form the next government, it would regain the confidence to stand up for the British people’s basic democratic rights. In the meantime, the British public has to rely on civil society organisations, like Liberty, who have launched legal action against Home Secretary Braverman’s attempt to reintroduce via secondary legislation, elements into the bill that the Commons rejected.

Trade and Corporation Agreement – Review, revision, or renegotiation?

Regarding the second crossroads, EU Commissioner Maros Šefčovič announced this week that the review will take place in 2026. Especially since Labour’s David Lammy recently stated that UK-EU relationships would be a Labour government’s top priority, interest as increased in the potential of this review to help craft a closer relationship and solve some of the problems with post-Brexit trade barriers. This seems a particularly urgent issue, as Stellantis – owner of Vauxhall amongst others – has warned that the TCA’s rules of origin (ROO) that will come into force in 2024 may mean UK production sites may close down. This may impress the urgency there is to reduce some of the many trade barriers Brexit has created.

However, Šefčovič’s speech at the EU-UK Forum annual conference this week has been interpreted as pouring cold water on any hopes that the TCA review could lead to reducing trade barriers. The written version of Šefčovič’s speech does not contain much to reach that conclusion. But reports of the delivered version of the speech, suggest that Šefčovič explicitly said “doesn’t constitute a commitment to reopen the TCA or to negotiate supplementary agreements.” Moreover, Stefan Fuehring, who heads the Commission’s TCA unit, was quoted as saying that changes to the deal would be a “very long shot” and that “[i]t’s a review, not a revision, not a renewal or even amendment of any sort.

These pretty clear terms contrast with what other EU sources have recently suggested. Peter Holmes, at the Progressive Economics Forum meeting last weekend, referred to a well-informed, unnamed EU source, which essentially stated nothing was off the table in terms of what to include in the review.

Given that Brexit borders pose serious problems not only for UK exporters, but also EU ones, as was illustrated by a stark warning of the European car manufacturer association regarding the above-mentioned rules of origins to be introduced next year, I doubt the EU would say no to the opportunity to improve cross-border trade with the UK.

As such, I am sceptical that Šefčovič and Fuehring’s statements are the final word in terms of what a reviewed TCA could include. To be sure, the TCA will not get us SM membership ‘through the back door’ without adhering to the EU’s key conditions (regulatory alignment, ECJ jurisdiction), but equally, I would not write off the chances of using the TCA to solve some of the issues created by Johnson’s hard Brexit deal. The ROOs for instance, are part of the TCA and here the EU and the UK have a very clear and direct interest in finding solutions. This will not take the form of a wholesale solution like SM membership would be, but rather a more selective, possibly sectoral approach.

The road to Bern-on-Thames

Commentators regularly reject any notion of sectoral agreements with the EU as ‘fantasy,’ because such an approach would be rejected by the Commission as ‘cherry picking.’ I am less certain about this. For one, as Peter Holmes writes in a recent report for the PEF, some ‘cherry picking’ – in the form of limited free movement (to musicians for instance) and SPS alignment for instance – has been put on the table by the EU itself. For the other, the Swiss case shows that the EU may not like the sectoral approach, but it is still willing to accept it under the condition that institutional issues are in an overarching ‘institutional agreement.’

The UK will of course need to adhere to the EU’s conditions for access to the SM, which will mean conceding regulatory independence and choose closer (dynamic) alignment in exchange for a solution. If the UK were willing to do that, a sectoral, ‘cherry picking’ approach may be perfectly possible. I doubt Šefčovič’s and Fuehring’s remarks imply that such an arrangement is out of the question. They may be setting expectations and preparing the EU’s negotiating position; but ultimately, given pressure from EU exporters and the pragmatism that tends to prevail in EU negotiations with third countries, I very much doubt this is the final word.

Of course, if the Conservatives win the next GE, that is unlikely to happen. If Labour forms the next government, things may be different, as a Labour or Lab-LibDem government might set us on the path to Bern-on-Thames. Most observers have rightly pointed out that the first term of a Labour or coalition government will certainly not lead to a rejoining of the customs union or the single market, even less the EU. Yet, the TCA review could be used as a steppingstone towards a road map on the way to a new relationship with the EU. Here the process could be used to test the waters for a more cooperative, less conflictual political relationship and for specific solutions to some of the chronic problems hard Brexit is inflicting on both partners.

 

Lessons could be learned from the Swiss decades-long struggles making its relationship with the EU work. Importantly, some of the sticking points on which Switzerland has not made any progress despite trying hard for a decade or more, may indicate how realistic it is for the UK to expect any movement from the EU on these points.

Switzerland’s relationship with the EU famously follows a special model based on over 100 bilateral sectoral agreements that have been put in place since the Swiss voted ‘no’ to EEA membership in 1992 (see my previous post here). Based on a quite extensive unilateral regulatory alignment of Swiss law on EU law, this model has allowed Switzerland near full single market membership without becoming an EU member.

In recent years, the model has come under pressure, because the EU increasingly insists on an overall ‘framework agreement’ that would solve so-called ‘institutional questions’ including dispute settlement and the jurisdiction of the European Court of Justice. After seven years of negotiations of this framework agreement, the Swiss government decided in May 2021 to pull the plug on the negotiations, leaving the Swiss-EU relationship in tatters. The EU had taken increasingly robust steps to keep Switzerland in line regarding its commitments under the bilateral agreements. In 2019, the lack of progress with the institutional framework agreement led the EU not to renew the ‘recognition of equivalence’ from the Swiss Stock Exchange (SWX), effectively banning EU stock exchanges from trading in Swiss shares. Similarly, after the failure of the framework agreement, the EU also suspended Switzerland’s ‘associate country’ status to the Horizon science programme. With sectoral agreements not being updated any longer, the ‘bilateral way’ will become narrower, and narrower until it will be gone.

However, it is important to note that the EU is not rejecting the bilateral way per se, but rather wants to complement these sectoral agreements with an overarching institutional agreement. Had the Swiss government managed to find a politically feasible agreement on these issues, the sectoral approach would have continued.

The list of contentious issues that led to the failure of the framework agreement will not sound unfamiliar to people following the Brexit saga. They included the question of unilateral dynamic alignment with EU law, the conflict resolution mechanism including the role of the ECJ in it, free movement of EU citizens and their access to social insurances, state subsidies, and finally wage protection and labour market access for posted workers.

In March 2023, the Swiss government decided to formulate a new negotiation mandate for its chief negotiator, which is expected to be published at the end of June. There has been a lot of speculation about what that mandate will contain, and which political forces will back it. Two things, however, are interesting from a British perspective regarding the renegotiation of the TCA – namely the role of the ECJ and that of trade unions in making a deal possible.

Regarding the key sticking point of ECJ jurisdiction over EU law, the Swiss side rejects any ultimate ECJ jurisdiction which is seen as a loss of sovereignty and potentially undermining Swiss direct democracy – Foreign judges have been a red flag for the Swiss going back to the folk tales around Wilhelm Tell’s defiance of the Habsburg. Here, two interesting solutions have recently been brought into play by the cantonal governments [GER]: One is the argument that while none contests the ECJ’s ultimate jurisdiction over EU law, any provisions in a framework agreement between the EU and Switzerland would not constitute EU law per se, but bespoke rules that should not be directly subject to ECJ jurisdiction. Related to that, one possible solution would be that any ECJ ruling on EU-law related matters may not necessarily be binding for the joint committee that oversees the Swiss-EU bilateral agreements. Indeed, any FTA or similar agreement the EU signs establishes a body like the Partnership Council established between the UK and the EU in relation to the TCA. This council brings together representatives of the UK government and the EU commission. I previously argued that it constitutes a cunning way to remove ECJ jurisdiction by one step, which makes it possible for the UK to claim it managed to avoid ECJ jurisdiction. While that claim is false, there may be a possibility of using the PC to add further flexibility. In the Swiss case the suggestion is that ECJ rulings are not binding on the PC but have merely guiding character. This would turn such a body into a way of both sides claiming they got what they want, although it remains to be seen whether the EU would be willing to make such a very considerable concession.

The second interesting point with potential lessons for the UK emerging from the revival of Swiss negotiations with the EU is the role of trade unions. In a situation where the hard right – in the Swiss case the Swiss People’s Party – is intransigent and will never agree to any deal negotiated with the EU, the centrist, pro-Deal forces will have to rely on the left to get a majority for the deal and avoid a defeat in a popular referendum. The left – especially trade unions – have been part of an unholy alliance with the Eurosceptic far right in sinking the institutional agreement the first-time round. However, the unions are opposed not for ideological reasons but for very concrete reasons related to wage protection and labour standards [GER]. Here, the Swiss government has started exploring what concessions it could get from the EU to get the trade unions behind a deal. Šefčovič has signalled some willingness to soften the EU’s opposition to the so-called ‘collateral measures’ introduced at the same time as Free Movement of People to avoid social dumping by companies from lower wage countries. The EU has been critical of these measures – which, among other things, allow Swiss authorities in some instances to grant domestic workers preference over EU workers (the so-called ‘precedence of domestic employees [GER].’ Flexibility from the EU on this key issue, would not only make a deal potentially possible, but also would have positive consequences for working people in Switzerland. Moreover, the Swiss trade unions are keen on Switzerland to ‘cherry pick’ also those parts of EU legislation that would lead to higher worker protection than Switzerland currently has. These areas include flexible/part-time working for instance.

Hard-right ideological opposition to anything EU-related has hence opened a window of opportunity for the Swiss labour movement to push through progressive reforms. While the political situation in the UK is obviously different, the broad configuration of an ideologically blinded, intransigent hard-right objecting to any reproachment with the EU on grounds of principle, and a more pragmatic Eurosceptic wing of the left, is not dissimilar. The review of the TCA – or any future negotiations with the EU about a closer relationship – may turn into an opportunity for trade unions and those parts of labour that were seduced by the absurd case for Lexit to get some progressive reforms in exchange for their support for a reproachment. Given that the UK’s labour law is at the lower end of worker protection of what EU law allows for, there is a real opportunity for the pro-trade union wing of labour to halt the race to the bottom that Brexit has threatened workers with.

 

Britain is approaching another cross-roads in its post-Brexit history. Not least because the Tory party – and with it the country – may be facing a cathartic moment – as Chris Grey puts – now that former Prime Minister Johnson – one of the most toxic figures in British politics – has resigned from Parliament. A lot of damage to our institutions and trust in the public realm has already been done. But it is to be hoped that there are still enough time and reasonable political forces left in the country to choose the path that leads away from Budapest-on-Thames to something closer to a Bern-on-Thames.

*This post is an extended and updated version of a talk I gave at the Progressive Economics Forum 2023 at the University of Greenwich on June 10, 2023

Brexit Impact Tracker – 5 June 2023 – Free Speech, Free Trade…Unfree Country

It is one of the biggest tragic ironies of the first decades of the 21st century that those who shout loudest about freedom are those who do the most to destroy it.

Last month,* Suella Braverman’s new Public Order Bill received Royal assent just in time for the coronation of King Charles III. It is widely considered that the law was created in response to protest by environmental activists like Extinction Rebellion and Just Stop Oil. It allows police officers to ‘stop & search’ people without suspicion and introduces new criminal sanctions for taking part in peaceful protests (It is now punishable by up to 12 months in prison to disrupt ‘hardworking people’ on their commute to draw attention to the fact that our planet is quite literally on fire). The law constitutes a flagrant attack on the basic human right of freedom of expression and has been qualified by the UN High Commissioner for Human Rights as ‘deeply troubling’ and ‘wholly unnecessary.’

We immediately got a taste of what this law will feel like in practice. The Met Police used its new powers right away not only to arrest republicans before they even got a chance to demonstrate against the coronation, but also activists handing out rape alarms.

These may seem like fairly minor incidents. Yet, history tells us that democracy rarely dies with a ‘big bang,’ but rather by a thousand cuts. The police may use their new powers mainly against environmental activists such as Just Stop Oil but could – and probably will – use them against other groups too, just like they did with the additional powers they were given in the early 2000s as part of the fight against terrorists. The question, as Richard Murphy puts it is now: Who will they come for next?

Free speech act

The Tories added insult to injury when the anti-free speech free speechers’ Higher Education (Freedom of Speech) Act received royal assent a few days after the coronation. Depending on its application and implementation, the law may very well have some positive effects on plurality of views being heard at universities. Indeed, I do not think we should discard any concerns about freedom of thought and speech in universities. For instance, universities’ decision to cancel events featuring pro-Israeli speakers for fear of backlash from pro-Palestine organisations seem problematic. Similarly, the debate about gender identification clearly has taken a toxic turn that now implies one may risk their job and career for wading into the discussion with however balanced and nuanced arguments.

Yet, there can be no doubt that the government’s intention with the Freedom of Speech act is not to detoxify scientific controversies or promote reasoned debate across a wide range of opinions and views. Rather, it is another ‘anti-woke’ move aimed at stoking the flames of the culture war. Rather than making debate at universities more reasonable, it most likely will achieve the opposite by making it harder to deny climate change sceptics – but also holocaust deniers, anti-vaxxers etc. – a platform in respectable scientific institutions. In a healthy democracy with a healthy public debate that may not be a problem, because people – and especially students – are expected to be able to tell truth from lie. Sadly, we do not live in a healthy democracy, and for the foreseeable future the law will most likely mainly be used by far-right ‘think tanks’ to challenge scientific facts and undermine the credibility of academics in pursuit of their private interests.

Public Order, Free Speech, and Brexit

What do the Public Order and the Free Speech Acts have to do with Brexit? Everything! Not in the sense that we needed Brexit to make these laws possible, but in the sense that both are the expression of the same reactionary political ideology, which sees egocratic politicians undermining democracy, while claiming their reality-denying policies represent what the ‘real people’ want.

Brexit allowed a group of far-right political entrepreneurs to highjack the Tory party; promising that it was possible to restore Britain to its former role of a world power. Standing in the way or that goal were simply the modern concept of pooled sovereignty and the rules-based international order. Brexiters seem to believe in a simpler, cruder understanding of sovereignty as an (ill-conceived) notion of ‘independence,’ whose realisation requires as a first step the rejection of international commitments and obligations, e.g. in the form of international conventions on refugees.

This conception of sovereignty at the political level is combined with a quasi-anarcho-capitalist understanding of the economy, where a simplistic understanding of how companies work leads to a ‘free enterprise’ ideology that denies regulatory instruments any value and informs a radical deregulation agenda whose realisation required the UK to leave the EU. Trussonomics emblematically encapsulates this IAE-sponsored economic thinking, but the basic ideas have survived Truss’s downfall on the right fringe of the Tory party.

The Public Order Act shares similarities with Brexit in this respect. Like the Brexit project it is based on a stubborn denial of reality (that Britain cannot be world power anymore in the case of Brexit; the severity of climate change and biodiversity loss in the case of the POA), promises a simple solution (‘taking back control’ in the case of Brexit; giving police power to suppress peaceful protests) to an entirely fabricated or exaggerated problem (EU membership, rather than often misguided economic policies adopted by the EU and its member states in the case of Brexit; preventing ‘hard-working people’ from getting to work in the case of POA). Both Brexit and the POA are policies that at the same time permit an extreme fringe of the political spectrum to grab power, while blocking necessary fundamental policy changes for both reasons of ideology and of short-term political and economic self-interest. The two policies – if Brexit can be considered a coherent policy – also bear similarities in terms of the utter dishonesty that they are based on. In the case of the POA, the most flagrant dishonesty is that the law was created by the very same government that shouts about free speech and riles against ‘cancel culture’ at every turn. As such, the POA illustrates to perfection what the underlying goal of the government is: the freedom for them to do whatever they want; unfreedom for the rest of us.

The wider significance of the POA, however, is even more troubling. The UK was one of the countries that has been instrumental in promoting the rights-based world order and as such also an important and active promoter of individual human rights, like the right to free speech and freedom of expression. While Tory sympathisers will certainly contest that the POA is in anyway anti-democratic or illiberal, it clearly constitutes yet another step down the path towards a less free, more autocratic country. This is dangerous not just for British citizens or people living in the country, but for the world at large, because other human rights infringing regimes around the world can now point to an important Western country that disowns the liberal world order it had been instrumental in building.

The next Brexiter frontier

The POA is very important for another reason too: It indicates that Brexiters are now definitely moving on to the next frontier of their project. Indeed, Farage’s admission on News Night that Brexit has failed, and the fact that a poll carried out by the Express found that 80% of the British population agree with him, shows that Brexit – as an instrument to gain political power – is broken.

Delusional Brexiters like Jacob Rees-Mogg, who recently claimed that the UK’s reaction to the Ukraine war was made possible by the exit from the EU, or Lee Anderson – who tried to construe Tata’s decision to invest in the UK as a ‘Brexit Bonus.’ But, these are – as Chris Grey aptly noted – only Brexit’s last defences and soon enough Brexit will become useless even for its most fervent defenders.  Indeed, for Brexiters, Brexit never was a goal, always only a tool to gain power and enrich themselves while reshaping the country according to their far-right reactionary worldview. Brexit cannot help to achieve this goal any longer, because only very few people still believe it is worth pursuing. Recent polling suggests that only 9% of people think Brexit has been a success and only 31% think it was right to leave.

Of course, EU-bashing will continue and sporadically flare up as we are trying to develop a new relationship with the continent, which inevitably will lead to some tensions and divergences of interests and preferences. Yet, on a daily basis, Brexit does not win votes and headlines anymore. Therefore, Brexiters are turning towards other goals and enemies. The renewed attack on the European Court for Human Rights (ECHR) led by Andrea Jenkyns who launched a petition – signed by 15,000 people, which she claims shows that the overwhelming majority of a country of 66,000,000 wants to leave the ECHR – is one sign of this. The POA and the increasingly aggressive attacks on anyone who does not share the Tory-rights’ far-right ideology is another.

These tendencies are not a sign of strength but of weakness. Having been in power for 13 years and having quite literally wrecked every aspect of the country, defeat in the next General Election seems all but inevitable; at least that’s what the Tories’ poor showing at the May local elections in England suggest.

Local elections

Having taken place around 18 months before the next General Election, local elections in parts of England and Northern Ireland were widely considered a test for the government and the opposition parties. Ahead of the elections, the Tories tried to manage expectations, predicting a possibly quite bad result. Party chair Greg Hands predicted a loss of up to 1000 of the 3000 or so contested seats. The actual result was worse than that worst case prediction, with the Tories losing 1063 seats and 56 councils. Meanwhile, in Northern Ireland, the pro-Brexit DUP party did not do well either, having been overtaken by Sinn Fein as the largest party at local level.

Despite the Tories truly disastrous performance, losing many ‘Red Wall’ council seats to Labour, and many ‘Blue Wall’ seats in their traditional heartlands to the Lib Dems, the conservatives spent the post-election weeks with their now favourite activity: Denying reality. Greg Hands tweeted about the few seats where conservatives were still doing well. Others focused on the fact that Labour did not do as well as Blair’s labour did in the local elections preceding the 1997 landslide GE victory (neglecting the fact that it was a very different set of local council seats that were up for grabs back then).

Much commentary has been published since to explain what this means for the GE next year. One of the most sophisticated ones, no doubt, is Ben Ansell’s blog. Deducing any implications from partial local elections for a General Election is always very difficult. But two points deserve noting: Firstly, anti-Tory sentiment seems to be strong in the country so that extensive tactical voting – whereby people do not vote for their actually preferred party but for the one that is most likely to beat a Tory candidate – has taken place; Secondly, there is a vast majority amongst the British electorate for more centrist and progressive parties than the one in power. Indeed, looking at the national equivalent share of the vote (NEV) – a measure that seeks to capture how the local election results would translate into a national election –, Labour now has a national share of 36%, the Lib Dems 18%, while the Tories now have 29% of estimated national vote share, down from 40% in 2021. The Greens too proclaimed a historic victory gaining 241 councillors and a council majority for the first time ever (in Mid Suffolk). Overall, then, at least 54% of voters seem to support parties with a more centrist policy platform than the governmental party, which is supported by less than a third of voters. To put it flippantly: If we lived in a real democracy, the Tories should not be in power at this stage.

The results are even more remarkable given that this was to first election to take place under the new rules on photo IDs. Much has been written about the blatantly biased rules the Tories have introduced regarding valid forms of voter IDs (see my previous blog post here). Some reports mentioned alarming levels of people being turned away at the polling stations. First systematic figures on the impact of the new rules, however, suggest that around .6% of voters were turned away and 37% of them did not come back with ID, which suggests a net voter suppression of 0.2% - although this figure does not take into account the number of people who were discouraged from voting due to the new rules and did not turn up in the first place. Regardless, the effect probably was at the lower end of what those opposed to voter ID feared and what the government had hoped for. Moreover, it would seem that some elderly people – who disproportionately vote for the Tories – did not understand or know about the new rules and were among those turned away, when the system was very clearly set up to achieve the opposite goal, i.e. suppress young people’s votes. Astonishingly, Jacob Rees-Mogg – who was in the Cabinet when the legislation was pushed through Parliament – freely admitted that the voter ID legislation was indeed an attempt at gerrymandering that has backfired. It is a sign of just how much damage the Tories have already done to British democracy that such a statement barely raises any eyebrows anymore. Indeed, Tory voters do not seem to care about such gross illiberal tendencies, while those meant to uphold democratic standards have reached a level of cynicism that means that such evident violations of the norms on which healthy democracies are built officially go unpunished.

The nationalist international: Darkness at the end of the tunnel

The other interesting outcome of the election was how the Tories strategically reacted to the obvious defeat. Given the strong support for more progressive parties, the conclusion may seem obvious that the majority in a General Election lies to the left of the Tory’s current position. Indeed, basic political science teaches us that majoritarian electoral systems lead to a competition for the median voter. That median voter clearly is further to the left than what the Tories currently offer. And yet, the main reaction to the electoral defeat amongst Tories seems to have been to claim that the poor results were due to a ‘betrayal’ of Johnson’s 2019 manifesto and the key to success lies in doubling down on the far-right strategy of undermining public services and the state, by cutting taxes, deregulating the economy, and becoming nastier.

This was the tenor of a meeting in Bournemouth, where a new Conservative grassroots movement – uniting many Johnson supporters – lay into the Sunak government about its betrayal of Brexit, the 2019 GE manifesto, and in general the abandoning by Sunak of the conservatives’ uncompromising far-right strategy. Worse still, the following week, many senior conservatives attended a meeting of the global movement of ‘national conservatism,’ which constitutes another attempt by US far-right groups to extend their influence to Europe. The group was founded by the US  Edmund Burke Foundation and regularly hosts authoritarians like Hungary’s Victor Orbán and supports post-fascists like Italy’s Giorgia Meloni. Its London meeting was attended by current members of the government and senior Tories – including Suella Braverman – and served mainly as a platform from where to broadcast conspiracy theories about why Brexit is failing.

Commentators have interpreted the relevance of the national conservatism meeting in the UK different ways. Nick Tyrone suggests that the NatCon strategy will not fly in the UK where people ‘even on the right, are reasonably liberal on a lot of things and in particular do not want the UK turned into some sort of poxy version of the United States of America.’ Some commentators even predict the end of the Tory party within the next two to three years as a result of its association with the NatCon movement. Chris Grey – in his Byline Times column (print version) – argues that a NatCon takeover of the Tory party might very well lead to its electoral obliteration and possibly a split of the party. Political scientist Tim Bale – quoted in the Guardian – suggests that we can expect the Tory party to further slide into a US-style right-wing MAGA extremism, but there is limited electoral potential for such a culture wars focused strategy to work in a situation where people mostly worry about their living standards.

As usual, I am somewhat more pessimistic than these commentators. There is the hope that the Tories being captured by an increasingly well-organised extreme right would lead to many voters defecting to an alternative centre-right party, i.e., the LibDems. That would spell an epochal shift in the UK’s party landscape and condemn the Tories to a marginal right-fringe position. However, equally likely is that the well-financed and right-wing press-backed Tory voting machinery will continue to be the main right-wing alternative to Labour, in which case a NatCons-led Tory party could pose a serious threat to liberalism in this country. To be sure, few people would currently completely buy into the NatCons discourse. But that may change if the UK’s oldest and electorally most successful party is led by a NatCon – David Gauke’s money is on Suella Braverman it would seem – who can use that platform to push the boundary of what is thinkable further into authoritarian, reactionary territory. If that came to pass, we could expect a relentless barrage of nationalist messages being blasted by the Tory propaganda machine, which eventually will start to turn what now seems like extreme ideas into the mainstream – similar to wat happened with the idea of Brexit. How ever extreme the views expressed at the NatCon conference now seem, once these things have been said, they already seem less shocking, simply because they have been said. They are not unspeakable anymore. From there to not being indefensible is only a relatively small step. And even if they may remain fringe views, they shift the entire political ‘field of the thinkable’ further to the right.

In this respect, another worrying takeaway from the NatCon conference is the OpenDemocracy’s Seth Thevoz’s observation that 80% of attendees at the conference seemed to be under 30. Rather than a blast from the past, might the NatCon ideology be a way to attract a certain type of younger voters – however marginal – to the Tory party, thus rejuvenating their electorate and diffusing its ‘demographic time bomb’? Regardless, it would be foolish to take lightly the fact that very senior Tories – including Braverman, Rees-Mogg, and Michael Gove – attended the NatCon conference. As Jonathan Freedland wrote in his Guardian column: The conspiracy theories thrown around at the NatCon conference constitutes the cultivation of a stab-in-the-back myth to explain away the ever more obvious failure of Brexit and the search for the traitor wielding the treacherous dagger will get nastier. The ditching by the government of the Retained EU Law bill illustrated that nastiness inside the Tory party.

The Retained EU Law Bill U-turn: Brexiter backlash against reality

The government has now official announced that it would drop the planned Retained EU Law (REUL) bill, which would have seen around 4000 pieces of incorporated EU-legislation be automatically repealed by the end of the year unless they were explicitly reviewed and retained. The move was widely expected and interpreted as further prove that Sunak was on a path to restore some normality and realism to the government’s approach to Brexit after the folly of the Johnson and Truss governments.

Yet, clearly the conservative party is not ready for even such a modest amount of realism as not axing a vast range of existing laws with any plan for replacement. The backlash against the government’s U-turn was fierce and Kemi Badenoch was in the midst of it. The Telegraph and other far-right Tory voices denounced the move as a betrayal of the spirit and substance of Brexit. Badenoch herself suggested it was made necessary by a ‘Whitehall blob’ conspiracy. So, rather than owning up to the new-found pragmatism and realism and starting the process of overcoming the madness of the Brexit years, the government itself accepts the far-right Brexiter narrative of ‘deep state,’ ‘civil service conspiracy,’ etc. Again, we see a shifting of the political spectrum in the UK, where defending a reasonable position is becoming politically risky! Instead, reason and pragmatism have to be disguised as a far-right conspiracy in order for the government not to see its authority wane.

Free trade

May 2023 will also go down in history as the month during which one of the two new Free Trade Agreements (FTA) the UK has signed since Brexit – the one with Australia – came into force. It has become common knowledge that this trade deal is probably one of the worst that any free country has ever signed (see my last post). A new report by Politico suggests that rather than Liz Truss, it was Boris Johnson who nonchalantly made major concessions to the Australian side over dinner in Westminster. Be that as it may, the key point is that another so-called ‘Brexit benefit’ turns out to be a shot in the foot instead. Therefore, we do not see Brexiters arguing about who can take credit for it, but about who should be blamed for it. The most damning, embarrassing, and humiliating illustration of just how absurdly bad the deal is for the UK was a short clip from an Australian TV show where three presenters literally laugh their heads off when discussing the UK’s export potential. So much for patriotism and national pride!

Labour to the rescue?

Given the gloom and doom that the Tories have brought to the country in their 13 years in government it may seem logical to turn to the main opposition party for hope of some light. Yet, despite the good performance at the local elections, Labour leader Keir Starmer too have reached the conclusion that the election results strengthen the case to double down on right-wing rhetoric in his attempt to turn the local- into a General Election victory next year. His article in the Express used language worthy of a Boris Johnson or a David Frost stating that “’our European friends and competitors are not just eating our lunch – they’re nicking our dinner money as well.’ Chris Grey in his excellent analysis of Labour’s strategy notes that this may be grubby, but may make sense to win back the votes of disappointed leave voters and perhaps necessary to gain marginal seats in the next GE, while not reducing dramatically Labour support in safer ones. Here, Labour’s success in Red Wall council wards may indeed have encourage Starmer in his thinking that his centre-right strategy is working.

Prof. Grey also argues that Starmer’s red lines of not rejoining the single market, the customs union, let alone the EU, are not actually unnecessarily limiting labour’s leeway regarding negotiation closer ties with the EU if they win te election, because rejoining any of these would be unrealistic in a first Labour parliament anyway.

Similarly, the Independent’s Ian Dunt argues that there is a large difference between Starmer’s rhetoric and Labour’s actual plan in terms of establishing closer ties with the EU. Indeed, looking at the details of Labour’s proposals, they appear more nuanced and radical than the rhetoric suggest. Thus, they include the possibility of dynamic alignment of standards, which would be an important break with a key Tory red line that forced hard Brexit onto the country and probably as far as any government can go in moving us closer to the EU.

These are all very good points. However, I find it difficult to fully share these quite optimistic assessments of Labour’s strategy. It may all make political sense if one assumes that winning back socially conservative ‘Red Wall’ seats in the North of England is key to a GE victory. Yet, I do not think Labour’s strategy to adopt some of the Brexiter discourse and language and their analysis of key policy issues in order to capture the leave vote comes without a cost. Accepting the Brexiter narrative and using similarly divisive language towards the EU implies accepting their flawed analysis of what caused British people’s grievances. Accepting the Brexiters analysis of the immigration issue and of free movement (as Labour does by backing the Tory’s ban on families of overseas students), of single market membership, but also of public order (Starmer refusing to commit to repeal the POA) legitimises the Tories’ analysis of the issues that the country is facing and thus implies buying into their worldview. That worldview may become a new consensus that may prove impossible to break and that sets a new baseline for what is politically feasible far to the right of what is currently the case. Accepting the Brexiters’ analysis of the problems and only attacking them on the delivery of their solutions will make it difficult for Labour to offer an alternative narrative that zeros in on the country’s actual problems, rather than the construed ones that fuel the Brexiter government (most importantly ‘overregulation,’ ‘loss of sovereignty,’ ‘mass immigration,’ ‘wokeness,’ etc.). Perhaps a second Labour term would afford the government more leeway to find its own voice, but I doubt the country can afford another five years of fighting windmills while not addressing the real problems. Once the country is freed from the Tory reign, what is needed is a swift re-establishment of the freedoms that successive Tory governments have taken away from us. Labour should make that goal an explicit manifesto commitment, otherwise illiberalism and unfreedom may become the new normal.

 

*For a combination of family- and professional reasons it has been impossible for met to find time to blog for over a month. I hope regular readers will forgive me for covering an eventful month in one – very long – post. I am hoping to get back to my regular fortnightly rhythm soon, but the summer months do not look promising. Regardless, Brexit continues to evolve, and I am determined to continue the task of documenting and commenting on how that process is affecting our country.

Brexit Impact Tracker – 1 May 2023 – Mayday, Mayday, May Day

Britain currently has the worst economic growth forecast among the G7 countries, the highest inflation amongst advanced economies, and is facing a myriad of other massive problems, such as its broken and parasitical housing and renting market, which is pushing families out of the most expensive areas like the capital, where primary school closures are the result. This is not even mentioning the real ‘wicked problems’ like the destruction of our natural environment (including our water) in the name of deregulation and an ill-understood pro-business attitude after Brexit.

Despite the distress signals, Brexiters want us to be patriotic and believe in sovereignty, as Tory MP Adam Holloway explicitly stressed this week during the parliamentary debate about a public inquiry into the impact of Brexit. Indeed, pro-Brexit politicians and media outlets seem to have gone into overdrive to defend the indefensible. The Telegraph seems to be spewing out columns and editorials at an increasing pace trying to explain why post-Brexit Britain is busted rather than booming; blaming the ‘Europhile establishment,’ the civil service, and the ‘Nanny state’ for the lack of positive impact of our departure from the EU on the British economy and society.

The British public, however, increasingly seems to be connecting the dots between the countries’ many woes and the single biggest change to its position in the world economy in over a generation. This week, the Parliament debated an online petition asking for a public inquiry into the impact of Brexit that had been signed by over 180,000 people. The view that Brexit was a mistake is now consistently – and by a 20% point margin – the majority view.

Deep down Brexiters know it too of course. Secretary of State for Business Kemi Badenoch’s plea for us to stop talking about Brexit, surely is the clearest admission of failure there can be. Had Brexit delivered on any of the promises that were made during the Referendum campaign, surely Brexiters would want us to talk about it.

The welcome government U-turn on the Retained EU Law bill (REUL), which would have seen up to 4000 pieces of legislation lapsing by the end of 2023 unless they had been reviewed and explicitly retained, can also be categorised as an admission of failure. The government has now decided that only around 800 pieces of ‘unnecessary’ EU law would be removed. The REUL bill had alarmed businesses and trade unions alike due to the regulatory uncertainty and the potential negative impact on workplace safety. The government’s new realism that has been at display at various points since Sunak took over from Liz Truss – most importantly regarding Northern Ireland – indirectly constitutes an admission of failure of the Brexit ultras’ approach.

Brexit ultras like Jacob Rees-Mogg and their newspapers read the situation very differently of course. They see Badenoch’s call for realism as the words of a weak minister who has not got the stature to stand up to the ‘Remainer civil service’ that is bullying her into becoming more moderate.

But the government knows that as a political and electoral project Brexit has run its course. A new poll shows that 59% of people think Brexit has made the UK worse off and a meagre 9% think it is better off. Calls for patriotism, belief in Global Britain, and sovereignty will not be enough in the long run to convince people that it was worth it. Especially because things are going to get worse, not least in terms of the economic impact of Brexit.

Alarming trade damages

The damage that Brexit is doing to UK businesses is ever more evident and now increasingly also documented and analysed in peer-reviewed academic publications. Two recent papers published in the academic journal Contemporary Social Sciences reach alarming conclusions for UK businesses.

A study by Jun Du and her colleagues uses the synthetic difference-in-differences (SDID) methodology to estimate the impact of the UK’s exit from the EU on UK trade compared with a synthetic, counterfactual case where the UK had not left the EU.

The two key findings are – firstly – that overall exports not just to the EU, but also to the rest of the world (RoW) have dramatically declined as a result of Brexit. Prof. Du and colleagues find that ‘exports to the EU since January 2021 are 22.9% lower on average, while exports to ROW are 11.3% lower as a result of [the Trade and Cooperation Agreement (TCA)].’ And no, this is not due to Covid or the war in Ukraine, as the study also shows that ‘the UK is an outlier [amongst advanced economies], with zero export growth during 2019Q1–2022Q1.’

Secondly, the decline in export volumes goes together with a decline in the variety of goods exported. The study shows that ‘the post-TCA average for exported varieties between 2021Q1 and 2022Q2 was only 42 thousand varieties; this is equivalent to a staggering 40% reduction on the December 2020 figure.’ These findings on trade variety are broadly in line with findings from other studies that also found a very significant decline in the number of exporting relationships with the EU, e.g. here. Worse still, this decline in exporting has primarily hit small companies who often rely on a small variety of goods and stopped exporting to the EU altogether or went out of business.

The study also finds that imports from the EU were initially down too, but then rebounded so that the gap between the real UK and the counterfactual UK has now closed in terms of imports from the EU. That, however, may change with the introduction from October of new border checks in the UK for goods coming from the EU.

Non-tariffs, hidden tariffs, and the struggles of small businesses

Several points are noteworthy here. The negative impact of exiting the EU has taken place despite the fact that the TCA guarantees largely tariff and quota free trade with the EU. Tariff and quota-free trade was indeed one of the alleged victories of Boris Johnson’s deal. Yet, it is his false claim that there would not be any non-tariff trade barriers that now turns out to be the key issue.

Non-tariff trade barriers in the form of customs checks and paperwork are enough to reduce trade very significantly. So, they are not some sort of limited nuisance for exporters, but a very real and in many cases existential problem.

Worse still, another study by Prof. David Bailey and colleagues finds that even tariff barriers come back into play indirectly due to the TCA. Small companies often simply do not have the capacity to deal with the additional paperwork and costs (estimated at between £5.5bn-£6bn years) for rules of origins (ROO) auditing and certification that are needed to benefit from tariff free exporting into the EU Single Market. An estimated quarter to one third of exports from the UK to the EU that could benefit from tariff free exporting under the TCA, actually do not enter the EU under zero tariffs! So, organisational resources and capacity are a key prerequisite for companies to be able to benefit from the tariff free trade under the TCA, which small companies do not have; putting them at a disadvantage compared to large companies.

This economic effect of Brexit on the population of UK businesses is often hidden in arguments about aggregate figures (such as the forecasted .08% GDP increase due to the UK joining the CPTPP). Behind the aggregates and the averages are very real businesses; and smaller ones are the ones that bear the brunt of hard Brexit. At the same time, small businesses are particularly important for employment in the UK, employing approximately 3/5th of all employees in the country. They are more prone to employ people throughout the UK’s regions and less inclined to downsize and relocate workforce abroad compared to large multinationals.

Teething problems v. structural damage

The findings of these studies also seem hardly compatible with the teething-problems hypothesis, which suggests that what we are observing are short-term adaptations to the new arrangement, which will allow firms to return to levels of exports like before Brexit. This may be true for large companies who have the organisational resources to cope with the additional red tape and have the financial resources to simply absorb the additional costs associated with exporting. Bailey’s and colleagues’ interviews with larger exporters hint at this to some extent. Yet, overall things seem to be getting worse not better.

Intriguingly, Du and colleagues note that “the negative impact of TCA on imports from the EU and ROW since January 2021 had mostly dissipated by the beginning of 2022 […]. The decline in export, however, has remained deep and persistent since January 2021. While the gap between the actual UK exports to the EU and the exports of the counterfactual seems to be narrowing in 2022, the gap in the UK exports to ROW is widening.”

So, the impact on UK exports to non-EU countries may be worse than the impact on exports to the EU. This finding once again belies the facile Brexiter idea – last on display when the UK joined the CPTPP – that lost trade with the EU can simply be made up for by more trade with the RoW (I have commented on this several times before e.g. here).

Brexiter trade economics are implicitly based on the simplistic assumption that the UK exports finished consumer goods that largely rely on ingredients and input factors available in the UK and that are largely produced, transformed, and assembled inside its borders. This idea may apply to certain produce, like Scottish whisky perhaps (although even that industry relies on imported Barley from Canada). The vast majority of manufactured products, however, are produced in complex supply chains spanning many countries. While a whiskey producer may be able to simply overcome trade barriers by internalising the costs of exporting to any given consumer market, for a producer relying on international supply chains of intermediary goods, the costs and complexities are multiplied by the number of border crossings.

Here, Prof Bailey and colleagues’ study of the impact of Brexit on just in time (JIT) supply chains in advanced manufacturing in the Midlands provides important insights. A key finding is that just-in-time supply chains are extremely sensitive to trade barriers, because they rely on little or no stockpiling and multiple border crossings of unfinished intermediary goods before final assembly. Here, Brexit has caused multiple problems that are not limited to paperwork, but also due to congestion and delays at ports.

Looking at supply chains more closely also leads us to relativise the rebound in imports from the EU. Here Bailey and colleagues’ work shows that while imports from the EU may have recovered in the aggregate, ‘in sectors with high non- tariff barriers (including motor vehicles and their supply chains), there have still been significant falls in imports.’

These disruptions to JIT supply chains, in turn, have knock-on effects on companies in the UK relying on these imports for their own production, leading to ‘lost orders from EU customers that in turn had triggered plant shutdowns and hence work- force redundancies,’ e.g. in Worcestershire (a 54% leave-voting constituency). Rather than ‘teething problems,’ the TCA seems to be causing structural damage to the supply chains UK businesses are part of.

Labour market and skills

The labour market impact of Brexit is arguably the most alarming aspect of the new post-Brexit trading arrangements with the EU. Prof Bailey’s study shows that ‘[…] there will be significant changes and challenges moving forward,’ because manufacturing companies in the midlands are facing ‘[…] gaps in terms of skillsets – and these will only become more difficult to plug now that they have lost access to a broader pool of European talent, even with a relatively liberal post Brexit immigration policy.’ This is confirmed by business leaders like Ryanair’s Michael O’Leary who recently talked about the “huge challenges” his company is facing in the UK largely due to its broken labour market and the costs associated with getting visas for EU workers.

An obvious adaptation to this lack of skills would be to train people in the UK. This strategy had indeed at one stage become semi-official Tory policy. Back in 2021 when labour shortages started to hit various sectors of the UK economy, PM Johnson and Chancellor Sunak tried to convince us that the shortages were part of the Brexit plan to move from a low-skill, low-productivity, and low-wage economy to one where all three would be high. They accused British companies of being drunk on cheap labour and suggested Brexit would lead to higher wages.

Prof Bailey’s work shows that we are a far cry from such a situation also because small manufacturing businesses ‘[…] are still completely oblivious to how apprenticeships work, the benefits and how they could access them.’

More generally, the dream of a high-skill, high-wage, high-productivity equilibrium will remain a fantasy as long as the government does not get real about the necessary policies to achieve this goal, which – as I and my colleague Chiara Benassi argued a while ago – must include policies that ‘encourage’ business to invest in their workforce and in productivity-enhancing technology. Like in many other areas, here too the UK is moving in the wrong direction with business investment on a long-term decline trajectory.

Without these policies and investments in productivity and training post-Brexit shortages in workers and skills will not magically lead to a high-skill, high-wage, high-productivity equilibrium, but to increasing labour costs for businesses that  many – such as those in the hospitality – cannot afford, which necessarily will lead to companies going out of business.

Inflation

The TCA is impacting not only on businesses’ ability to export and on labour markets, but also on the prices of consumer goods. Here, too, we can expect things to get worse before they get better.

With 19.2% last month, Britain has the highest food inflation in Europe while also being one of the countries that relies most on food imports (30% of all the food consumed). Given that wages are not rising at a similar pace, more poverty is the logical result from this trend.

The new customs checks on food imports that will come into force from October this year under the government’s ‘target operating model’ (TOM), will make things worse. Like their UK counterparts, EU businesses may stop exporting to the UK, which will lead to reduced choice for British consumers. Worse still, while Jacob Rees-Mogg had promised that costs for businesses would be minimal, it now becomes clear that all goods that are eligible for border checking will have to pay a fee of £23 to £43 from January, not just those that are actually being checked, as initially promised. Another broken Brexit promise with very real implications for the businesses concerned.

Brexit opportunity (costs)

Beyond the economic impact of trade barriers, another key finding of Bailey and colleagues’ study concerns opportunity costs. The respondents cited in the study refer to both Covid and Brexit as ‘really unhelpful distractions,’ which prevent the company from focussing on the real issues of getting ready for ‘net zero’ by making their production more climate friendly and preparing for digitisation of manufacturing (‘manufacturing 4.0’).  

This is a crucially important point. While politicians still debate Brexit opportunities or lack therefore, it is time that we start talking about the Brexit opportunity costs. Brexit is a distraction and a waste of resources at a monumental scale. As I noted previously, all the time, resources, and energy that went into Brexit since June 2016 – and indeed before – could have been spent on solving the real issues we are facing, such as water quality, child poverty, the crumbling care sector, the NHS, not to mention climate change. Instead, the UK affords itself the luxury of using up much of its political and state capacity to fight windmills! I suspect future generations will look back on Brexit Britain and puzzle over how a country – famed for its pragmatism – could get caught up in a mass wish psychosis that made it blind to the ever louder distress signals.

May Day

Taken together, recent academic studies on the impact of Brexit on the UK economy provide alarming findings. The triple whammy of reduced exports, increased prices, and opportunity costs caused by the Brexit distraction means that the declinism that Brexiter Daniel Hannan decries is more than appropriate.

To halt the downward spiral the British economy and society is caught up, we do not need ‘patriotism’ and a belief in ‘sovereignty.’ We need to take the distress signals from UK businesses seriously and we need politicians to start adopting the right kind of policies to address these issues.

Given that it is International Workers’ Day today, one important step in this direction would be to recognise the importance of decent working conditions and wages for a prosperous post-Brexit Britain. Not only would that improve social peace and societal cohesion in the country (‘levelling up’ and all that), but also it would increase domestic demand and thereby provide a boost to the economy. Yet, as long as not only the Tories and their vile media backers, but also Labour, engage in union bashing and deny workers their right to fight for decent wages, there is little hope that this will ever happen.

Despite all the rhetoric, other than patriotism and sovereignty, Brexiters have nothing to offer to working people. Tory MP Adam Holloway believes that “it is easy to disdain patriotism if someone is economically and socially mobile and derives their self-worth from a well-paid job, or if their life is made easier by cheap labour as a result of free movement." Yet, while he lauds the end of free movement for its effect on the price of labour (and hence wages), his party continues at every turn to deny workers the right to demand precisely that. If Brexiters were serious about improving working people’s living standards, supporting trade unions who are the main instrument to achieve that would seem like the only logical stance. Yet, claiming Brexit will end cheap labour, while denying workers the wage rises they need and deserve is perfectly in line with the now very familiar pattern of dishonesties, logical distortions, and gaslighting that Brexit has come to epitomise.

Brexit Impact Tracker – 17 April 2023 - Trading Places: The English Channel versus the Pacific

It may become a post-Brexit tradition that the Easter holidays are a time when the British media are full of stories about miserable travellers stuck at the port of Dover and debates about who is to blame. I wrote about Brexit Britain’s botched borders almost exactly one year ago.

Since then, the situation has not improved. It may very well be that next year, it will be even worse, because the EU will introduce additional fingerprinting and biometric checks in November.

Just how botched Brexit Britain’s borders are is further illustrated by various stories about musical bands, musicians from Ukraine, and school children, being refused entry to the country.

The botched borders problem is not limited to the movement of people though. There are increasingly worrying stories about the UK losing control over the safety of food imports, because the UK no longer receives intelligence from checks conducted inside the EU. A new system of post-Brexit border checks – the Border Target Operating Model – is still more than six months away and will not be fully operational before 31 October 2024. And of course, while that system may help reducing health and food safety risks, they also imply more Brexit red tape and thus additional costs not just for EU exporters to the UK, but also for UK companies and consumers relying on imports from the EU.

The botched borders problems are a particularly damning indictment of the failure of the Brexit project, given that the referendum was to no small extent won on the promise of ‘taking back control’ of our borders. One key reason why the UK government has been unable to take back control over its borders with the EU, is that it would much rather focus on trading with far-away places in the Pacific than with its neighbours across the English Channel. Partly, that is because signing new trade deals – however bad – makes for much better headlines than trying to fix the problems Brexit has caused for UK travellers and exporters.

What do trade deals do?

I know that I have written about the reification of trade deals many times before (e.g. here and here). So, I apologise to readers for the repetitiveness, but I will not stop calling out the nonsense that the government and other Brexiters say and write about trade deals and their economic impact. In fact, trade deals are the perfect object to demonstrate that the Brexit project is based on economic illiteracy or wilful ignorance of economic facts.

The UK’s recent joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a case in point (I briefly wrote about it in one of my latest posts). It was hailed by the government as a major Brexit benefit.

The Conservative Party, - as well as Boris Johnson, and the Express – try to sell the CPTPP agreement by arguing that as a result of the deal ‘UK businesses will have tariff-free access to a market of 500 million, now worth £11 trillion.’ That statement is misleading in different respects. For one the £11 trillion is the total sum of GDPs of the 12 members of the CPTPP – including the UK. For the other, the UK already has free trade agreements with 9 of the other 11 members. The two new ones that are added through the CPTPP are Malysia (GDP of £300bn) and Brunei (GDP of £11bn). So, the difference in tariff free market access is £311bn not £11tn.

But these are not even the main flaws in the argument for CPTPP. Trade expert Dmitry Grozoubinski put it brilliantly: ‘Describing CPTPP as an "£11trillion trade deal" because its membership's GDP adds up to 11 trillion is like looking at the monthly user count and telling everyone you're romantically involved with 75 million people because you just downloaded Tinder.’

Indeed, the key question that most Brexiters seem unable to understand or simply choose to ignore is: what exactly do trade deals do to an economy? Specifically, what will CPTPP membership do to the UK economy?

According to the Office for Budget Responsibility (OBR) the answer is: not very much! As I mentioned in my previous post, the official estimate is that it will add on aggregate .08% to the UK’s GDP over 10 years. This seems minuscule and far from sufficient to offset the negative impact of leaving the EU single market, which the Office for Budget Responsibility estimates to be a reduction of 4%.

The government and people celebrating the CPTPP accession resorted to the strangest analogies to try and explain why the OBR’s forecast was speculative and the deal was transformative for the UK.

The strangest analogy of them all, perhaps, was Trade Secretary Kemi Badenoch’s likening the UK’s joining CPTPP to a big company buying a start-up. Her point seems to have been that you buy a startup because you are confident in its potential rather than what it is today. In her view, the potential of the CPTPP consists in the possibility that countries like Ecuador, Costa Rica, and possibly even China may join the club, thus increasing the size of the free trade zone the UK has joined.

The analogy, of course, makes no sense. Rather than likening accession to a free trade area to the acquisition of productive asset, it should be likened to paying for a stall at a farmers market or a trade fair. Indeed, access to a free trade area is only worth as much for a country as it has things to sell. And that’s the rub: As the Financial Times’s Alan Beattie pointed out, those things that the UK has to sell (services) are not covered by the CPTPP, while those products that are covered, the UK does not produce very much of (i.e. manufactured goods and agricultural products). Worse still, the few companies that do produce the things that could benefit from the agreement (e.g. cars) are likely to decline due to the fact that the UK is not part of the EU single market anymore, which reduces incentives to produce in the UK. Indeed, even patriotic, country-loving (but Monaco-dwelling) Brexiter Jim Ratcliff prefers to move production of cars inside the EU’s single market rather than continue producing in Brexit Britain. Beattie concludes that, ‘the CPTPP is basically irrelevant for the UK because it doesn’t produce the kind of stuff that might benefit, and Brexit means it’s less likely to start.’ But that sort of basic logic seems lost on Brexiters who instead busy themselves with the most absurd mathematical contortions to try and save Brexit from reality.

Brexiters’ anti-maths mindset

It is a hallmark of Brexiter economics to quickly switch from claiming that it is too difficult to assess the impact of Brexit on UK trade and the economy (e.g. because of confounding factors like the pandemic) to ‘it is very simple’ (e.g. when rejecting sophisticated methods to estimate that impact in favour of naïve schoolboy maths).

This leads to economically and mathematically illiterate explanations of why ‘Remainers’ are wrong about the costs and benefits of Brexit in general and of CPTPP membership in particular. A recurring example are the writings of Robert Tombs – specialist of French history of the late 19th and early 20th century and co-editor of Briefings for Britain. His recent article in the Spectator zeros in on the EU membership fee to explain why Remainers are wrong about Brexit’s impact on trade. He estimates that the UK’s net membership dues were between £8bn and £11bn in 2018. Therefore, any reduction in post-Brexit trade with the EU (which he estimates between 3% and 5% and hence between £5-8bn at 2019 prices), would have to be seen in relation to the cost of membership.

Tombs seems unable – or more likely unwilling – to understand that such a naïve calculation does not even start to capture the complexity of Brexit’s economic impact on the UK. For starters, while the EU membership fee used to come out of the public coffers, EU funding flowing back into the country did not only go to the UK government, but also to private sector actors including for instance researchers in universities through research grants. This means that most accounts of net contributions to the EU budget have always been exaggerated, because they would not take into account the latter payments. More importantly, this implies that while the UK government may be saving money that would have been paid as membership fee, it is not the government that mainly suffers from the consequence of losing EU funding. Most importantly, as people are now finding out, there is no guarantee that the UK government will use the money it saved from the membership fee for the same purpose that EU funds were earmarked for – most importantly perhaps regional development.

Similarly, the membership fee was a cost to the UK government’s public finances and not having to pay it constitutes a saving for the Treasury. Yet, that of course does not mean that this saving somehow offsets the harm the new trade barriers do to UK businesses. The point seems almost embarrassingly obvious, but given the level of dishonesty of Brexiter economics, sadly it needs to be made.

Tombs’ suggestion of simply deducing the membership fee from the amount by which trade has been reduced is hence absurd. (Incidentally, his estimation of a 3-5% reduction of trade due to Brexit is underestimating the actual effect according to recent ONS figures, which estimates it at around 9% compared to 2019. If we use the ONS’s conservative estimate of a 9% reduction compared to pre-Brexit/pre-pandemic times, then Tombs £3-5bn trade reduction becomes more like £9bn and thus within the range of membership fee he claims the UK paid of £8-11bn. So, even on his own flawed terms, the calculation makes little sense).

Tombs goes on to say that “our annual exports (in surplus) to [CPTPP countries] are running even now at £60 billion” and that therefore a “mere 10 per cent rise would more than offset losses in exports to the EU.”

Again, many things are wrong with this facile calculation. For one, it is unclear where the £60bn figure comes from, but based on the government’s own data, it clearly includes exports of both goods and services (which taken together amounted to around £57bn in 2019). Like I mentioned above, one big problem with that figure is that services are not covered by the agreement and therefore may not obviously increase after joining the CPTPP. One could argue, that some business services are related to goods, e.g. after-sales services such as installation, repair, and maintenance – so there may be some positive effect on services from increased exports of goods (if that were to happen), but given what the UK has to sell, how far away these trading partners are, and that we already have FTAs with most of them, it seems highly unlikely that this will lead to the sort of increases in trade Tombs is hoping for to offset the reduction in EU trade. This is all the more the case that Tombs neglects the fact that ‘shallow’ FTAs like the CPTPP tend to generate ‘trade diversion’ rather than only ‘trade creation.’ In other words, in many cases exports are diverted from trade with non-FTA members to FTA members rather than generating new exports.

Given Tombs’ facile calculations, for once I have to agree with Sunak that the ‘anti-maths mindset’ in the UK is damaging the economy.

Sustainability

Beyond the purely economic and monetary questions, one particular concern with the UK’s joining the CPTPP has been the impact on environmental standards and habitats. In particular, the UK’s concessions to Malaysia to accept the removal of tariffs on palm oil, whose production constitutes a sever threat to rain forests and their ecosystems, has led to criticism and concerns.  Trade specialists argue that the real world impact of the removal of already very low tariffs may not be as dramatic as feared, but the case thus illustrate that the UK government will not hesitate to undermine current environmental standards to get a trade deal. Conversely, Shanker Singham was probably one of the most honest Brexiters lauding the CPTPP not so much for any economic benefits, but for pushing the UK down the road of deregulation, which would make a rapprochement with the EU more difficult.

Trade experts and economists generally argue that having an FTA is always better than not having one, even if it does not add much to aggregate economic performance. That may be true from a narrow economic perspective, but certainly not when environmental and social factors are taken into account. Indeed, it is not sufficient to purely focus on aggregate macroeconomic statistics to assess the impact of trade on a national economy. Yes, having a .08% uplifted in GDP seems – all else equal – preferable to not having it. Yet, the aggregate impact of a trade deal on economic growth – however small or large –, does not help the worker whose job has disappeared due to import competition, or the farmer whose farm is no longer viable as a result of reduced barriers to trade.

Indeed, free traders like to point out that ‘[t]rade liberalisation over the past 50 years has lifted hundreds of millions of people out of poverty and there are countless people alive today because their governments opened up their economies and embraced free trade.’ That figure is overwhelmingly driven by China who’s joining the world economy since the 1970s has led to dramatic changes to average per capita GDP and household income. The flipside of that development was that on the other side of the pacific (and elsewhere), millions have seen their living standards and jobs decline due to the increased competition that cheap imports from China represent for local producers. MIT Professor David Autor has called this phenomenon in the USA the ‘China Shock’ and has shown that the devastating impact of China joining the WTO has had on the previously industrialised areas of the mid-west in the USA. A similar effect has been found for the case of the UK and has been linked to voting for Brexit. Indeed, trade experts point out that the benefit of FTA is oftentimes not more exports, but cheaper imports. Cheaper imports are great for consumers, but they may be disastrous for producers and workers.

Global Britain, domestic pain

The delusions of grandeur that drove the Brexit project over the Global Britain cliff, tragically inflicts most pain on those whose suffering led them to believe in the promise of a Britain that can defy gravity and geography.

The BBC ran an article reporting that ‘big firms [are] a lot more confident about the future,’ because energy prices are coming down and ‘Brexit problems ease.’ Yet, commenting on the findings, Deloitte’s chief economist conceded that "[i]n many ways [the survey] mirrors what we are seeing at household level. The difference between the haves and the have nots is widening." Indeed, while big companies and the well-to-do may have the resources to absorb the Brexit shock, small manufacturing companies are in a very different position, as recently published research by David Bailey and his team shows. In other words, big businesses like INEOS may quite literally be able to defy geography by trading the UK for tax havens or places inside the EU’s single market. Smaller ones, on the other hand, are subject to the iron law of trade gravity, which is pulling them back from the lofty hights of Brexiter promises to the hard ground of reality.

Given the disaster Brexit has been so far, it is understandable that the government and Brexiters want the British public to gaze into the distance towards the Pacific region, rather than looking too closely at what is happening at home.

Who is to blame for Brexit (and nationalist populism)? A strange new elite theory [additional points]

I have broken my now usual fortnightly, because the discussions around Matt Goodwin’s new book – which, according to his publisher, presents a ‘bold new theory for our ongoing political instability’ – on social media and in the British press both fascinate and annoyed me in equal measures. I have written a short piece for the Encompass web page criticising Goodwin’s limited understanding of the issue of social class. Here, I thought I would publish my other concerns with his ‘theory,’ which did not fit into the Encompass piece.

 To reiterate, what I wrote on the Encompass web page: Goodwin’s theory explains national populism – a better term would be ‘nationalist populism,’ because that is what it really is – that has dominated British politics in the past years and that brough us Brexit is primarily a popular reaction against a ‘new elite’ or a ‘new ruling class.’ Over the past fifty years, that new elite increasingly has been shaping the country according to its radical progressive (‘woke’) values, while the ‘masses’ of ordinary people suffer from the consequences of the elite’s ill-informed relaxed attitude towards mass- and illegal immigration and towards the ‘breakdown of families.’

Goodwin then develops what I would call an ‘elite displacement’ theory: Since the 1970s, the new elite has progressively displaced the old elite, which was ‘mainly defined by its wealth, inherited titles, estates, “small C” cultural values and, often, its lack of university education,’ and was associated with ‘an old boys’ network of wealthy, right-leaning elites in the City, the Tory donor class and the private members’ clubs on Pall Mall.’ While ‘out of touch’ with regular people in socio-economic terms, the old elite shared cultural values with the masses, while the new elite does not. Therefore, the emergence of the new elite made non-elite people revolt, while – by implication – they were quite happy to be dominated by the old elite.

Goodwin’s elite definition is threefold: education, location, and inclination (values/opinion). Indeed, the key defining features of the new elite are their education (Russell Group university education), where they live (‘postcodes in the most affluent or trendy districts in London, the big cities or university towns’), and the values they hold (progressive-liberal, ‘woke’).

Goodwin’s ‘theory’ is confused, self-contradictory, and flawed in many respects. Including the very definition of the new elite. In terms of education – which Goodwin sees as the foremost determinant of the new elite. For instance, a quick look at the list of British Prime Ministers who graduated from Oxford University shows just how insufficient the education criterion is to distinguish a new from an old elite. Graduates from Oxford clearly are overrepresented amongst the country’s PMs all the way back to the 18th century. Goodwin may object that elite universities like Oxford ‘have swung sharply leftwards over the past 50 years,’ which makes recent Oxford graduates members of the new ‘out of touch’ elite. But keen observers will note that the PMs that have graduated from Oxford in the last 50 years were primarily Tories including Thatcher, Cameron, May, Truss, Sunak and Johnson (who Goodwin otherwise considers a ‘renegade member of the elite.’) Hardly people that have been successfully indoctrinated with ‘radical woke’ values.

The ‘postcode criterion’ is equally unsuitable to clearly distinguish the venerable old elite from the nefarious new one, given for example that the neighbourhoods of ‘West London’  that Goodwin sees as the ‘enclaves’ where the new elite ‘hunkers down’ are as much – probably more – populated by hedge fund managers and bankers, as they are by ‘lefty lawyers’ and other members of the new elite.

So, ultimately, all that is left of Goodwin’s distinction between new and old elite, is the former’s ‘out of touch’ progressive values about immigration, family, and the like. The bold new theory that Goodwin provides seems to be based on a definition of elites that is neither socio-economic, nor based on education, but merely based on opinion.

It is this ‘thin’ and ultimately banal definition of the new elite as those who embrace progressive values that explains why – despite Goodwin’s insistence on the importance and novelty of the educational divide – both Cambridge-educated journalist Emily Maitlis and Gary Lineker who left school with four O-levels are considered members of the same new elite.

Lineker’s criticism of the government’s plan to stop small refugee boats from crossing the English Channel was the opportunity for Goodwin to present his theory to readers of tabloid papers. Lineker’s comment – which I think is spot on in several respects, but Goodwin finds ‘idiotic’ – that the language used in debates about the Illegal Immigration Bill was not dissimilar to the language used in Germany in the 1930s shows – according to Goodwin – how out of touch the new elite is with the people in the country who largely support the government’s harsh immigration policy.

What Goodwin’s account of the Lineker affair completely ignores, is the fact that the reason why it became an ‘affair’ in the first place is that Lineker was suspended from his job for simply speaking his mind using his personal Twitter account. Furthermore, the suspension was decided by Tim Davie, former deputy chairman of the Hammersmith & Fulham Conservative Party (a borough in West London, which Goodwin otherwise considers an ‘enclave’ of the new elite), on Tory party donor Richard Sharpe’s watch. Surely, had someone with right-wing views been suspended for a personal Tweet, Goodwin – like other ‘free speech warriors’ – would have criticised the blatant ‘cancel culture’ at the BBC. Instead, he takes aim at the presenter for having had the audacity to criticise the Home Secretary’s potentially illegal immigration plan, because the latter is allegedly supported by the British people.

The latter claim in itself is problematic. Polling by Ipsos shows that 56% – i.e., a majority! – of people say they do not trust the Tories policies on asylum seekers ‘very much’ or ‘at all’. The Concerning channel crossings, the percentage of people who distrust the Conservatives is even higher (59%), while only 32% trust them. Goodwin’s claim that Linker’s opposition to the Tories’ Illegal Immigration Bill is out of touch with the British people seems false.

Unless, of course, you define the ‘real’ British people tautologically as those who agree with the government’s harsh approach to immigration – which is exactly what Goodwin’s strange elite theory does. Goodwin’s elite is primarily one defined by opinion – those who agree with his nationalist and traditionalist values speak for the people, those who do not are ‘out of touch.’

It is easy to debunk Goodwin’s ‘bold theory’ by pointing out some of its more egregious logical flaws. If the woke, radical-progressive elite is indeed the new ‘ruling elite’ in the country, that ‘wields enormous influence over not just politics but the prevailing culture,’ how come that for the past 12 years the Tories have been in power? Goodwin writes that if only graduates had voted in the 2019 General Election, then Corbyn would currently be Prime Minister. Yet, he isn’t. How can this be explained in Goodwin’s theory? Former Tory Downing Street Chief of Staff Nick Timothy comes to the rescue, arguing that Goodwin’s theory is not about political-, but about cultural power. But Goodwin’s theory rests on the argument that new elite ‘preaches’ beliefs that have few costs for themselves, but which ‘negatively affect other groups in society’ and gives as an example the impact of ‘mass migration’ on domestic workers. If the argument is that the new elite only has cultural power, why would their views on immigration matter for the British people in a country that has been governed by Conservatives for 37 out of the last 50 years?

 Goodwin could probably make a case that the new elite has done all the damage before an ‘awakening’ of the masses in the UK thanks to UKIP or Brexit. But if the masses managed to get what they wanted in both 2016 and the 2019 General Election, then clearly the power of the ‘new elite’ is not as all-encompassing as he suggests. And if he does indeed worry about a narrowing of ‘the range of voices represented in our national debate,’ then having a liberal elite that is not in power but can be heard surely is a good thing.

Another evident fact that shows that Goodwin is wrong is – ironically – his own success. I wonder how many readers of this post – most of whom I would assume tick more than one box of Goodwin’s ‘new elite’ check list – have heard of Prof. Mike Savage. Prof. Savage is a Professor of Sociology at the LSE and has studied social stratification, class, and inequality in the UK for decades. He has used his knowledge not to divide but to try and understand the lack of social mobility that is plaguing the country (not to advocate ‘intermarriage’ among elites as Goodwin’s theory probably would expect him to do). Yet, it is Goodwin, not Savage who has captured the ‘national conversation’ and is omnipresent on social media. The reason why it is the other way round, of course, is that the right-wing press – owned by rentier billionaires – gives Goodwin a massive platform that Prof. Savage would never get. That in itself should lay to rest Goodwin’s arguments about the woke dominance of the public conversation in this country.

As I argued in the Encompass piece, Goodwin’s theory is particularly weak in terms of the socio-economic aspects of the new elite seems. Socio-economic status is secondary to the trinity of education-location-inclination; presumably, because class is so obviously unable to explain what is new about the new elite. What he has to say about the new elite’s socio-economic status is that they are relatively wealthy, benefit from globalisation and from the buoyant housing markets in the postcodes where they live.

However, if there were a neat coincidence between university education and reaping the benefits of globalisation, then the current socio-economic status of many academics would be particularly hard to explain.* For Goodwin, the new elite ‘has been the real winner of university meritocracy, hoovering up the gains from globalisation and an economy that was rebuilt around the graduate class.’  He was probably too busy writing his book to notice to what extent the living standards and working conditions of academics have declined over the past decade, while those of Vice Chancellors and others in senior management have aligned upwards with practices previously only known in the private sector – as is illustrated by the current head of the universities employers association UUK. This too hints at a different root cause of current economic grievances that not just affect blue-collar factory workers, but increasingly white collar professionals. Namely, the dominance of economic and business theories that consider work as a cost to be minimised not a valuable asset.

Goodwin sometimes seems to suggest – and probably genuinely believes – that his decrying the new elite’s role in causing a backlash against liberalism may serve as a warning to ‘close these divides’ between new elite and masses, lest ‘the revolts of the past decade will soon grow into a much more serious and far-reaching rebellion.’ At the same time, the tone of his Twitter messages and of much of what he writes in The Sun, suggests he is hoping for that revolt to happen. If he really worries about ‘our leaders on the left and right […] importing a divisive identity politics from America,’ which ‘directly undermines Britain’s traditional civic culture,’ then he will be disappointed by the impact his writings are having on the public discourse in this country. Thus, rather than interpreting it as a warning against divisiveness, other commentators of Goodwin’s ilk, like Nick Timothy have taken Goodwin’s theory as a call to arms to ‘crush the liberal elite.’ Rather than an explanation of our social reality, Goodwin’s strange elite theory, seems more like a self-fulfilling prophecy that contributes to transforming a very diverse and pluralistic country into the nationalist populist us-versus-them ideal.

*As an aside, academics and universities are of course a privileged target of nationalist populists. As such adherents of Goodwin’s Manichean ‘us -versus-them’ world view will no doubt lump me together with the ‘new elite,’ because I strongly object to nationalism and to some extent to social conservatism. This too shows how very limited Goodwin’s new elite theory is. As a Catholic self-identifying as a big N big L Neo-Liberal, my relationship with conservative values ‘is complicated.’ However, I do agree to some extent with some of the things Goodwin says about excesses in universities, notably the risks of an ill-defined diversity policy. Indeed, I agree with some right-wing conservative arguments that there is a certain risk that the Equity, Diversity, and Inclusivity (EDI) agenda in British universities can itself become illiberal and negatively affect academic freedom. That is not to say that I reject the ideas of systemic racism and other biases against minorities that urgently need addressing; even less that I agree with right-wing critics’ arguments about the extent of the problem with EDI – especially when compared with the much more severe problem of rising right-wing nationalism – or the remedies they suggest (‘war on woke’). But I do think that – if done badly – EDI can be weaponised and become as exclusionary and divisive as right-wing nationalist populism. That latter statement may shock some readers. But it does illustrate that there is a huge diversity of views amongst academics on such issues, not an all-encompassing dominance of a monolithic‘‘woke ideology.’ In a pluralistic and liberal society one should be allowed to adhere to aspects of the EDI agenda, while pointing out its risks and flaws without being branded either ‘woke’ or a right-wing reactionary.

Brexit Impact Tracker – 2 April 2023 – Has the Brexit Spell Been Broken?

Since my last blog, several important political events have taken place in UK politics – including the Spring Budget and Boris Johnson appearing in front of the Privileges Committee. However, the most remarkable one in Brexit terms, was certainly the vote in the House of Commons on the so-called Stormont Brake. This new instrument is part of the Windsor Framework (WF), which has been recently agreed – and now formally signed – by the EU and the UK government. The Stormont Brake is meant to guaranteed that the Northern Ireland Assembly has a say about EU law applying to NI.

 What was remarkable about the vote is how the ERG failed to orchestrate the revolt many commentators had feared would take place if the DUP decided to oppose the WF (which it did). Before the vote, the ERG’s assessment of the framework had been expected to be ‘bad for the government,’ to reignite Brexit tensions, and possibly threaten Sunak’s government. Politics Home’s Adam Payne considered that “a rejection [of the framework] by the DUP combined with a large Conservative back bench rebellion would put the PM in a tricky political position, challenging his authority and dashing hopes that Sunak would be able to put the Tory party's ghosts of Brexit to bed once and for all.” 

Ultimately, the ERG managed to mobilise 22 conservative MPs to rebel against the Stormont Brake – despite the fact that its position was backed by two former PMs Liz Truss and Boris Johnson. So, the vote went Sunak’s way with an overwhelming majority, not requiring Labour’s votes who also voted in favour.

Given the formidable force that the ERG has been inside the Tory party since the 1990s, this result is remarkable. As Chris Grey notes in his Brexit & Beyond blog “it is plausible to say that the grip of the ERG has finally been broken, and that Sunak, unlike any of his predecessors since 1992, has successfully faced them down.”

So, is this a turning point for British politics? Did the last weeks mark the moment where Brexit has finally loosened its iron grip on the Tory party? Has Sunak managed to call the ERG’s bluff, showing others that it is possible to start mending our relationships with the EU without the Brexit Ultras being able to bring down the government? Could this pave the way to a process of ‘rapprochement’ with the EU that could lead to something like Brexit in Name Only and thus eliminate the many downsides of the hard Brexit the Tories have imposed on the country?

The thread that may unravel Brexit

It is certainly too early to answer any of these questions with certainty. Politics are contingent and many things can happen especially in such a volatile environment as early 21st century British politics. The vote on the Stormont Brake is significant however, not just in terms of what it says about the ERG’s grip on the Tory party, but also in terms of what it means for Northern Ireland. The DUP’s opposition to the WF and its rejection of the Stormont Brake, does mean that there will be no return to power sharing in Stormont. Yet, increasingly, this may become as big a problem for the DUP as for NI. Indeed, the vast majority of people in NI are in favour of the WF and consider the NIP a less important issue than more mundane problems, like the costs of living. That means that the DUP increasingly withdraws into a self-imposed separation from what people in NI want – including their own voters amongst whom support for the WF dominates over opposition (36% v. 22.8%). Opposing the WF may hence soon become an electoral liability outside of the hard-right core of the unionist vote.

More generally, as I wrote a few months ago, Northern Ireland has a very special position in the Brexit saga. Due to the importance that both the US and the EU accord to maintaining peace in NI, there are limits to how reckless politicians in Westminster can be when it comes to NI. This imposes a more moderate approach to Brexit in NI than in the rest of the UK. That is what made the NIP and now the Windsor Framework possible, which essentially consolidates NI’s unique position inside the EU’s Single Market for goods and in the UK’s internal market. Sunak drew a lot of ridicule and anger when he hailed the NI’s unique position, which – according to him – creates the ‘world’s most exciting economic zone.’ He may have a point: In 2021, NI ranked second – only behind London – of any UK region for FDI per capita inflows. NI’s increased attractiveness for FDI due to its membership in both the EU and UK internal markets under the NIP has further increased now that the WF has been agreed, providing more stability to the post-Brexit arrangements. However, this may create another problem for Sunak: NI may become the prime example of the benefits of a softer Brexit, thus increasing calls in other parts of the country to get a similar special deal. From a Brexiter perspective, having a part of the country that benefits from a closer relationships with the EU constitutes a constant reminder what the rest of the UK is missing out on. That, may become the thread that unravels Brexit.

NI could also become the reason why the UK will not leave the ECHR despite Tory hardliners’ continued push for it. Indeed, given the centrality of the ECHR for the Good Friday Agreement, the decision to leave the convention would have major implications for the UK and undo any progress about the NIP that has been made in recent months. Here too, NI’s special position and its importance outside of the UK means not only that it is to some extent sheltered from the UK government’s Brexit strategy, but also that it actually may become a roadblock to some of the most extreme Brexiter strategies, including Brexit 2.0.

The Return of ‘establishment Toryism’?

So, have we turned a corner and more reasonable forces are on the way of taking back control of the Tory party from the far-right, libertarian extremists who have pushed the country over the edge?

One observer who thinks so is the Telegraph’s Allister Heath – but he does not think it is a good thing and will not last for long. In a combative article commenting on the failed rebellion over the Windsor Framework, he fulminates against the elite who ‘believes in the top-down rule of experts, social engineers, lawyers, economists and philosopher-kings, empowered to construct, enforce and impose a “better”, more “rational” world.’  These are the values of what he calls the ‘failed establishment Toryism.’ Instead, he wants the Tories to speak for those who are Eurosceptic, ‘sceptical of net zero (and supportive of technological solutions to environmental problems), anti-European Convention on Human Rights (ECHR), anti-woke, pro-economic growth for all, and pro the creation of independent yeoman-citizens who stand on their own two feet, own their own homes and are able to accumulate financial wealth.’

The strategy he advocates for our relationship with the EU is not ‘rapprochement,’ but confrontation. Indeed, Heath wants the UK to pull out of the ECHR to trigger ‘an all-out bust-up with the EU, cancelling Windsor and forcing another, nastier renegotiation of our relationship with Brussels.’

Heath’s views are disturbing for several reasons. For one, he still seems to believe in the ‘hardball diplomacy’ strategy that so spectacularly failed under Johnson and Frost, which has further been confirmed – if further confirmation was needed – by Stefaan De Rynck’s recent book on the EU perspective on the Brexit negotiations. For the other, his arguments are utterly incoherent and self-contradictory. He rejects the rule of experts and technocrats, while calling for a belief in ‘technological solutions to environmental problems.’ He sees the ‘green lanes’ at NI customs established by the Windsor Framework as proof that Remainers were wrong (because they show the UK can get from the EU what it wants), while complaining at the same time that the very same agreement only constitutes ‘a series of practical concessions’ from the EU that ‘can be withdrawn at any time.’

It would be reassuring to attribute such views to just one right wing fanatic who is being given a platform way bigger than his wit. Yet, rather than a return of more reasonable ‘establishment Tories,’ what strikes me is that these unhinged ramblings were published in the Telegraph and such views still hold considerable sway in the Tory party. Some of this was on display again this week around the UK’s joining the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) free trade area.

The CPTPP: Entrenching Brexit?

Unsurprisingly, Brexiters hailed the signing this week of the CPTPP agreement as a great victory for Sunak and Brexiters in general, which shows that Remainers do not understand just how great Great Britain can be without the EU. Brexiter Shanker Singham went further, claiming that CPTPP membership would mean Britain can never join the EU’s customs union again and therefore Brexit can no longer be reversed. So, given that CPTPP membership seems to have been unlocked by the signing of the WF, will it have the paradoxical effect of making rapprochement with the EU possible, while at the same time locking the UK out of full EU membership forever?

The idea that CPTPP membership constitutes some sort of ‘poison pill,’ which means the UK cannot go back into the EU, is certainly false. Trade experts have pointed out that leaving the CPTPP again to rejoin the EU would be perfectly possible. Also, Chris Grey points out that there have been suggestions in the past that the EU may also apply for CPTPP membership.

Regardless, it is unlikely that keeping the UK outside the EU was the reason for the UK government being so keen on joining the trade block. Equally, it is hard to believe that the UK government seriously believes that a trade deal that is expected to add just 0.08% to the UK’s GDP makes any real differences to the UK’s economic fortunes. Or, for that matter, that this supposed Brexit benefit will convince Brits that it was all worth it, when the more directly observable downsides of Brexit, such as the queues at Dover persist and are in all likelihood going to get worse.

The real reason for the government’s enthusiasm for the CPTPP agreement is simply the continuing reification of Free Trade Agreements as a form of symbolic policies, which – just like the Rwanda policy or the Chancellor’s free Nursery hours promise – are not meant to actually solve any real world problems, but rather to provide positive headlines to increase the government’s popularity. The damage these symbolic policies do to Britain and the natural environment are disregarded. That is true not just for trade policy, but also in the area of immigration.

Dogs and whistles: Immigration

Besides trade, the other policy area the Tories are clinging onto in their desperation to avert electoral defeat is immigration. The debates about the Illegal Migration Bill are still ongoing in Parliament and a considerable number of Tory MPs had considered that the draconian bill that is probably contrary to international law, is not draconian enough, asking for further tightening of rules. After talks with the government, the Rebellion seems to have been defused for now. However, it is clear what this Tory-internal political dynamic does to the UK’s immigration policy: It pushes it further to the right. When an already extremely harsh law is being challenged for not being harsh enough, what MPs are doing is shifting the political dial further to the right. As soon as demands for harsher treatment of immigrants are tabled and discussed, the initial proposal automatically becomes moderate compared to the new one. Once a compromise has been found, we have moved another step towards the right. Some sources suggest that Home Secretary Braverman had secretly encouraged the rebellion in order to put pressure on the PM to make the bill even harsher.

The Tories’ strategy to play the immigration card has also seen an appalling campaign in recent days by Tory MPs and right-wing newspapers blaming opposition Leader Starmer for crimes committed by immigrants while he was director of public prosecutions. Meanwhile, home Secretary Braverman clearly feels encourage to push the boundary of racist dog whistling even further, openly singling out on national television British citizens of Pakistani descent for grooming ‘white English girls;’ A statement that is contrary to the government’s own evidence on the matter of grooming gangs.

This dynamic of increasingly radical anti-immigrant policies will not worry most Tory MPs. Immigration is one of the very few issues on which the public still trusts the Tories more to do a good job than Labour. The issue is important to people and indeed is moving considerably up on people’s list of priorities, albeit not to the hights it had reached in 2016. The reason why it is moving up the agenda is of course a direct result of the Tory government’s and its tabloid press’s own agitating about the issue.

Are things looking up for Sunak?

The Tories symbolic policies, the lies about supposed economic benefits of trade deals, and the dog whistling about immigration may be appalling, but they are potent ones. Indeed, while for a long time it looked like a complete Tory wipe out at the next general election was all but inevitable, things have changed in recent weeks. With Sunak being able to record some successes – including sorting the Northern Ireland issue while squelching the rebellion from within his party – some faint voices start to be heard who have not written off the Tories completely. Tim Bale – in a new book – notes that support for the Tories may be more resilient than may have been apparent during the chaotic Johnson and Truss premierships. Similarly, on the News Agent podcast, pollster James Kanagasoorium pointed out the almost unheard-off configuration where the lead of the Labour party over the Tory party is not reflected in a nearly equally large lead of Starmer over Sunak. While Labour still lead the Tories by more than 20% in terms of voting intentions; Starmer is only 5% points ahead of Sunak in terms of who people think would be the best PM. The latter metric, Kaangsoorium notes, is a much better predictor of GE outcomes than voting intensions for parties. Much will happen between now and the next GE – including local elections in May this year –, but Sunak has achieved what he promised: namely to stabilise the Tory ship somewhat and bring it back on course for an election victory.

He has done so with a strategy that seeks to throw just enough red meat to the right wing fringes of the party, while seeking some rapprochement with the EU. It is likely that he will continue to pursue this course, given that it is working remarkably – and indeed quite unexpectedly – well for him. This does create further policy uncertainty in Britain though. For each policy issue, the question is, will Sunak see it as an area on which it is worth taking on the Eurosceptic right-wing fringe of his party, or is it one where he should let them have a victory? It is clear that on immigration he will always cater to the right-wing of the party, while it is equally clear that on Northern Ireland he is ready to take on the Eurosceptics, presumably because the stakes and international pressure are so high in that respect. In many other areas, it is not clear, however, whether reasonable policy-making will fall pray to symbolic policy-making to appease the extremists in the party. The next weeks will show how strong Sunak now feels. If he does feel emboldened by the WF and the CPTPP victories, he may be more inclined to drop the Retain EU Law Bill than he previously was. If he still feels vulnerable or feels he owes the right-wingers in the party one for not rebelling against the WF, he may conversely be more likely to push it through against the advice and pleas of virtually any legal expert or businessperson in the country.

Therefore, what we will most likely see in the coming weeks and months is some sort of double game by the PM, which will consist of showing pragmatism and seeking rapprochement with the EU on less salient issues for the public and Tory right wingers, while engaging in symbolic adversarialism on issues that the Eurosceptic fringe of the party and the public care more about. As such, the Brexit spell has not been broken completely, but it certainly has lost some of its magic.