Brexit is a shambles and everyone knows it. Journalists around the world, from New York to Hamburg, know it. People in the UK know it: the latest YouGov polls show that a majority of people now believe Brexit is not going well (53% in September up from 38% in June), while the percentage of people who consider Brexit is going well dropped from 25% in June to 18% now. The government knows it too, as is illustrated by the U-turn regarding its initial refusal to grant HGV drivers exemptions from strict new immigration rules and the fact that the Army has now to be brought in to deliver fuel to petrol stations.
The strongest evidence that everyone knows that Brexit is not going well, however, is that rather than trumpeting about ‘Brexit dividends’ the right-wing press and Brexiteers now spend the bulk of their time trying to convince the public – and probably themselves – that Brexit has nothing to do with any of the problems we are facing.
An often mentioned argument is that other countries too have lorry driver shortages. Germany’s SPD Chancellor candidate Olaf Scholz’s comments that Brexit caused the UK’s lack of lorry drivers, was met with anger and Brexiteers pointing out that Germany too is 60,000 lorry drivers short. The big difference, of course, is that in Germany that lack does not seem to lead to anywhere near as disastrous consequences as in Britain. No empty shelfs, no lack of fuel at petrol stations there – presumably, because inside the single market, it is easier to deal with such issues. As such, Brexit may not be to blame for the fact that lorry drivers and other low-skilled workers left the UK during the Covid pandemic. It certainly is to blame that they are not coming back.
There is still some reporting on Brexit victories and dividends of course. Some pro-Brexit media seem to celebrate the involvement of the Army in fuel delivery like a good thing. But reports of Brexit victories are increasingly vague, unconvincing, and irrelevant to the population. Thus, in its desperation the Express turns to comparing the aggregate size of the financial industry in the UK in comparison with Germany, France, and Italy to claim that Brexit is working. The overall size of the financial industry, however, may be of little consolation to people who are facing increasing energy and food prices, increasing national insurance (NI) contributions, and cuts to universal credit.
In this situation, without reading too much into the results of just one poll at one point in time, it is interesting that the percentage of people who still considering Brexit is going well (18%), is moving closer to the 14% of people who define Englishness as a racial concept, which I wrote about before. This may of course just be a coincidence, but it may also hint at the fact that Brexit increasingly only appeals to a hard-core of unapologetic nationalists in the English population.
Brexit - The man-made foot-and-mouth disease
Stuck in its self-imposed ideological straitjacket, the government continuous to struggle providing any solutions to the labour and supply chain issues the country is facing. Its only answer is to loosen visa rules for poultry workers and lorry drivers ever so slightly. It is not clear what the government is hoping to achieve with this move, when industry experts clearly reject the measures as too little too late. With the temporary visas, Johnson acknowledges the problem and has blinked, but without any real policy plan. Given his ideological red-lines, all he can provide are fake solutions, which then need to be revised continuously. Thus, the initial temporary visa scheme was meant to be strictly limited until Christmas Eve and came with a warning from Defra that “[t]hese measures are specific, time-limited and one off. This scheme is not a medium or long-term solution for labour supply issues and they will not be replicated in future years.” Only a few days later, the Johnson was force to extend the scheme until March, to then announce on the first day of the Conservative conference in Manchester that the extension will remain under review and further extensions could not be ruled out. The temporary visa scheme is yet another fake solution to very real Brexit-induced problems, and indirectly Johnson seems to know it.
The impact of labour shortages on the poultry and pig industry are potentially huge. One farmer comparing what might be coming – i.e. a massive cull of pigs who cannot be processed – to the foot-and-mouth disease of 2001. This time, the disease is called Brexit and is entirely self-inflicted.
In the meantime, Polish and French Turkey producers – not facing any labour shortages or able to deal with them effectively – are gearing up production to increase exports to the UK market ahead of Christmas, replacing domestically produce Turkey with imported one. This is an increasingly familiar shift in trade patterns between post-Brexit Britain and EU countries: Exports from the UK to the EU collapsing – especially in the food and drink industry – but the EU’s exports to the UK holding up or even increasing (They need us more than we need them anyone?).
Wages not Sovereignty
The truly remarkable change in recent weeks, however, is a shift in Brexiteer discourse away from sovereignty to wages. The combination of labour shortages, supply chain problems, increasing inflation and the simultaneous tax raises and reduction in universal credit mean that the Brexit impact is now becoming very concrete for people. As a result, it seems like the government’s line of defence has shifted from sovereignty to wages. While a few months ago, any negative impact of Brexit on people was shrugged off by arguing the supposed regain in ‘sovereignty’ was worth it, it would seem that Brexiteers are aware that this argument will not cut it anymore when increasing numbers of households may be facing very concrete economic grievances and tough choices, e.g. between heating and eating.
In this context, wages have become the new sovereignty. Increasing wages for British workers is the Brexit dividend Brexiteers are now trying to sell to the public as having been part of the plan all along. The new importance of wages for the Brexit narrative is illustrated by two interviews the PM gave this week. In one of them, he was tempted into dismissing cancer death rates and declining life expectancy insisting on the priority of wage increases instead: “I’ve given you the most important metric. Never mind life expectancy. Never mind cancer outcomes. Look at wage growth.” In the other one, he insisted that real wages are going up for the first time in a decade. That claim is misleading as Andrew Marr pointed out to the PM. Indeed, the Office of National Statistics (ONS) cautioned against 2021 pay growth figures, because they are compared to the lower base rate of 2020 due to Covid.
Regardless, quite ironically, after decades of Tory governments undermining trade unions – the single most important factor keeping working conditions and wages at decent levels – a Tory government now desperately needs wage increases. The hope is that the rationing of labour supply will mean market forces are going to drive wages up without any change to the anti-union, liberal labour market regulation.
In the process, it is the haulage industry and other companies relying on immigration who are now portrayed as the villains for having relied on immigration. The PM blamed the "mass immigration approach" for having made the haulage sector less attractive by reducing wages and "the quality of the job".
Incoherence and contradictions
All the talk about improving the conditions of low-paid workers contrasts – in another sign of the utter incoherence of this government’s strategies – with the fact that with the increase in NI, the end of furlough, and the unprecedented cut to universal credit, living conditions of those on low incomes are about to be made a lot worse.
Moreover, if the plan was to increase low skilled workers’ working conditions and wages, the nuclear option of exiting the EU, causing massive disruption to trade patterns and supply chains, and ending free movement of people were certainly not necessary conditions to achieve that goal. Like Samuel Earl pointed out in his NYT essay, EU countries like the Netherlands have managed to improve working conditions in the haulage industry simply by legislating in favour of employees. But that, of course, does not fit with a Tory government that is populated with people subscribing to the libertarian ‘Britannia unchained’ ideology.
Most importantly, however, the reason to be sceptical about Johnson’s plan for better wages and working conditions for low skilled workers is that it is based on a fundamental misunderstanding of the link between the nature of skills in different sectors, and the real issues that have been afflicting the UK vocational training system for decades.
Skilling up the workforce
In his conference speech in Manchester, Johnson rejected what he called the ‘mass immigration’ model, by stating instead that people " […] want us to be a well-paid, well-skilled, highly productive economy and that's where we're going."
It is unclear, how, a policy trying to achieve that would address the shortages of lorry drivers – or indeed shortages in any other low-skilled jobs. Johnson seems to confuse two things here: One is providing enough British workers with the skills they need to drive a lorry – or pick fruit and vegetables for that matter – to replace the decline in immigrant work force; the other one is to fundamentally change the nature of the UK economy away from a low wage, low skill, low productivity economy to one that specialises in higher-value added activities. Training people to enter the latter type of jobs may actually make it more difficult to fill current shortages in low-skilled workers in services, farming, gastronomy with domestic workers more difficult. An increase in the skill levels of the domestic workforce, will reduce the domestic supply of low-skilled workers.
Even if the upgrading of the UK economy is the overarching – and certainly laudable – goal, what the Johnson government has to propose in this respect, goes hardly beyond a slogan (‘skilling up the workforce’) and certainly does not amount to a coherent policy plan.
The UK has been struggling for a very long time to provide manufacturing companies for instance with workers that have the necessary skills to contribute to high-value added activities. Johnson has promised to finally tackle this problem, after several governments before him have failed to do so. However, his plan for vocational training is mainly based on measures that seek to encourage young people to choose apprenticeships and vocational further education over university education. The way in which Johnson wants to achieve this, however, is by making it harder for certain parts of the population to go to university. Two measures in particular are being discussed: introducing minimum requirements for grades to enter university and reducing the salary threshold at which student loans have to be paid back. Both measures are expected to disproportionately hurt young people living in poorer areas of the country – where educational achievement and salary levels are lower.
So, the government’s plan for skills is mainly to force people into apprenticeships, rather than making apprenticeships more attractive and fit for purpose by properly funding them and thus allowing providers to develop programmes that lead to skills that employers value. The government does promise some additional spending, but this seems to be mainly geared towards improving dilapidated buildings of further education colleges, rather than allowing providers to improve the content of the courses and thus actually improve the skills that are being taught.
The policy is also based on a misunderstanding of what is actually wrong with the UK vocational training system.
A recent academic study by Chiara Benassi of King’s College London and colleagues shows that the British vocational training system suffers from at least three big problems, which hurt small and medium-size companies (SMEs) in particular. Firstly, there is a lack of coordination and trust amongst employers, which creates disincentives to invest in training of employees, as they may be ‘poached’ by others. The lorry driver shortages provides an example of this happening even in low-skilled sectors, with haulage groups accusing supermarkets of poaching drivers. In higher skilled industries, this risk leads to underinvestment in training.
Secondly, and more importantly according to the study, frequent government reforms have made the training system complex and opaque, so that it is difficult for both trainees and employers to navigate the complexity and understand the quality of different training offerings.
Thirdly, the vocational training system in the UK is organised as a quasi-market, in which providers competed for funding from the same ‘pot.’ This has led to a proliferation of qualifications and a focus on completion rates, rather than the quality of training and the adequacy of skills provides.
None of these issues with vocational training in England are being addressed by Johnson’s plan, which simply focusses on forcing young people down that path by preventing them from going to university. It is unclear how such an approach will lead to happier and more productive workers.
Only the desperate….
In some sense, though, Johnson’s plan for further education and training is consistent with his other policies. The visa exemptions for lorry drivers and low-skilled workers are granted on a basis that makes taking up these jobs extremely unattractive and hence only likely to be taken up by the most desperate workers. Similarly, the plan for further education is based on the idea that when people are desperate enough or do not have any other option, they will do the job employers need them to do. That’s not a recipe for productivity or happiness. But then, Johnson’s political career was not propelled by happy and content voters, but by the angry and frustrated ones. So, perhaps, there is more strategic thinking in his plans for the economy than I give him credit for.
Labour and wages
To be fair with the Tories, they are not the only party struggling to come up with a coherent plan regarding wages and working conditions. In a widely publicised move, Andy McDonald quit his position as shadow secretary of state for employment rights and protections in protest over labour leader Keir Starmer’s alleged opposition to a £15 minimum wage pledge. The motion was accepted in a vote by Labour Party members.
During the Labour Party conference in Brighton, Starmer also promised a hiring spree at NHS to reduce waiting times for treatment of mental health conditions. Part of the plan is to hire an additional 8,500 NHS staff. It is unclear, of course, how a future Labour government would be achieving that, given that the NHS has been in a staffing crisis since the Brexit vote, which is unlikely to improve without a radical change in immigration policy, which the Labour Party is not currently promising.
Johnson’s way out – Victories on the Symbolic Battlegrounds
With Brexit increasingly showing its teeth and the government having switched from claiming that Brexit was about sovereignty, to claiming that it was about wage growth and up-skilling, there is a risk that if these new, material, and measurable promises do not materialise, we will see a renewed radicalisation of the Johnson government over symbolic issues. Indeed, Brexiteers may soon need victories on the symbolic battlegrounds leading to more bad policies that will further damage the country.
One such symbolic battlegrounds is the conflict over fishing rights, which may soon be reignited. The fishing industry has provided new estimates that suggest the industry may lose more than £60m in income every year due to reduced access to EU and Norwegian fishing waters, while France is further increasing pressure on the EU to be tough on Britain over the handling of licences for French fishermen. This provides formidable conditions for a high-profile row with the EU.
Another symbolic battle ground is Northern Ireland, where escalating the row over the Northern Ireland Protocol may very well become the main strategy to distract the UK population from the Brexit-induced economic crisis. As Chris Grey has argued, instrumentalising the NIP in this way would be highly irresponsible, but certainly not surprising from the Johnson government, especially once it has manoeuvred itself into a corner from which there is no escape.