Brexit is failing us. That must be the one overarching insight of the past two years. The past couple of weeks have provided ample additional evidence for that conclusion.

Thus, this week evidence emerged that the Financial Sector in the UK may not have experience the rapid decline some had expected before the Referendum, Brexit seems to have led to sluggish growth at best, but more likely a slow decline of the UK financial services industry. Thus, banking jobs are estimated to be 91,000 fewer, compared to a situation where the pre-Brexit trend of financial service growth had continued. Symbolically, this week, the UK also lost its position as the most valuable stock market in Europe.  At the same time, supposed Brexit benefits have been increasingly exposed as not being much of a benefit at all. Most importantly, perhaps, the lustre has come off off one of the most important Brexiter tropes related to Brexit benefits, namely the ability to conclude Free Trade Agreements (FTA) with countries around the world. While I have argued for a while that the FTAs concluded by then Trade Secretary Liz Truss were concluded for purely symbolic reasons without any regard for their real world impact, now even mainstream media outlets openly question the significance of the FTAs that have been concluded when compared to the damage Brexit is otherwise doing. More significantly still was a devastating speech by former cabinet minister George Eustice in the Commons this week, which constituted a full-blown attack on Liz Truss and chief trade negotiator Crawford Falconer. In the speech, Eustice argued that the UK had made far too many concessions to Australia in order to conclude the AUS-UK FTA by a date chosen by then Trade Secretary Truss for purely political reasons. Coming from a former Cabinet minister and Brexiter, this is an astonishing admission indeed. Not quite as high profile, but nevertheless significant, were the statements made by former Bank of England (BoE) economist Michael Saunders who squarely blamed Brexit for the damage done to the UK economy, which will almost certainly see a return of austerity in the not too distant future. Finally, a BoE monetary policy committee member blamed Brexit for high food prices and hence a decline in real wages.

In short then, despite Brexiters having been in complete control of government since late 2019 at the latest, they have not managed to create anything that would allow them to say: ‘See, we told you it will be great.’ Instead, the situation they created is an absolute, complete, utter, and unmitigated shambles on every imaginable front. This was illustrated this week by Andrew Griffith – a Treasury minister – who failed to name a single Brexit benefit when put on the spot in the Commons.

With Jeremy Hunt’s autumn statement, we are now back in fiscal conservatism territory, although outright austerity has been delayed until after the next general election (GE) in 2024. Still, living standards are set to decline by 7% by 2024 and the middle classes are the ones to lose most from the economic strategy. Needless to say, that this is not a visionary new economic strategy leading to the sunlit uplands we were promised before the Brexit referendum.

The will of the people…of 2016

In their desperation, Brexiters cling on to the claim that Brexit is the will of the people whatever its real world impact six years after the referendum. Jeremey Hunt, in an interview with Sky, even claimed that the UK had decided to leave the EU following a ‘proper democratic process.’ That of course is a false claim, given that the Electoral Commission has clearly established that there was nothing proper about the Referendum campaign. Even if we were to accept that the referendum result was legitimate, Brexiters have to face the awkward question what exactly makes 23 June 2016 the only point in time when people’s opinion mattered. Since then, the mood in the country has clearly changed, with all polls I am aware of suggesting most people think Brexit was a mistake. Thus, according to a recent YouGov poll 56% - including 20% leave voters in 2016 – thought leaving was a mistake compared to 32% who think it was right to leave. Similarly, an Omnisis poll even found a 57% majority in favour of rejoining, against 43% staying out. That does not mean rejoining is a realistic option, but it clearly shows that the people do not want hard Brexit at any cost. At the very least, these figures suggest a mandate for a closer relationship with the EU. Chris Grey rightly asks, “Just for how long and how far can a referendum, the mandate of which has now been fully discharged, be used in defence of a version of Brexit that was not even the subject of that vote?”

Looking for Neverwhere

Unable to make their Brexit promises a reality – despite being in control over the government –, Brexiters now seek to push Brexit back into the realm of the aspirational, the yet-to-come sunlit uplands, the just-around-the-corner land of plenty. The Brexit Britain of the promises is becoming Neverwhere. A place that exists somewhere, sometime, but not here and not now. Brexit is becoming a myth, an aspiration, a hope.

One of the reasons Brexit has failed so miserably is precisely illustrated by the continuing debate about what model the UK should follow. As unbelievable as this may seem for a neutral observer, six years after the referendum vote and two years after Brexit became a reality, the UK government still has no idea what form it wants Brexit to take. After Liz Truss’s short-lived government’s attempt to implement an economic strategy that came close to the Singapore-on-Thames model of Brexit failed spectacularly, making us all poorer in the process, Brexiters are looking elsewhere for inspiration.

Last week, Jeremy Hunt was accused of secretly ‘plotting’ to pursue a Swiss-style arrangement, which led Nigel Farage to threaten a comeback to ‘crush’ a ‘plot to reverse Brexit.’ This week, both the PM and Hunt disowned any Swiss-style agreement and Hunt instead proclaimed he will turn the UK into the Silicon Valley of the world.

What is most astonishing about these debates is that they should have taken place long before a referendum was called. First the government should have explored what the options were, then it should have drawn up a realistic and reasonable exit plan, then it should have put that to a vote. Instead, here we are two years into real existing Brexit and the government still has no clue what to do with the country’s newfound ‘freedom.’

The problem is that this situation is unlikely to change, because Brexit was inherently a project based on an illusion. As Neil Shofield-Hughes argued in an excellent Yorkshire Bylines article: Brexit was a promise of having agency rather than being subject to decisions taken elsewhere. It was a promise of regaining control over our lives. But the fatal flaw in the project has always been that the loss of control many people feel is only to a limited extent the EU’s fault. There are other sources of disenfranchisement that have nothing to do with the EU. For one, we live in a country where the majority of us are governed by a government they did not vote. In the 2019 General Election (GE) 43.6% of voters cast their vote for the conservatives, while 56.7% of voters did not get the government they wanted. Worse still, despite the week popular support, the party who won the election can continue to appoint Prime Ministers and significantly change the policy direction of the government without any voters having a say in it. For the other, in a world where a considerable number of rules are made by international, rather than national bodies, the EU may be perceived like one such body imposing its rules on member countries. Yet, it also constitutes a bloc that allows member countries to shape those rules and to create a counterweight to the rules emanating from other international bodies or countries – say the WTO or the USA.

The fatal flaw in Brexiter thinking is that it is based on the idea that if you leave the EU you can somehow leave all the constraints behind that come with the reality of 21st century global economy and politics – rather than having to choose whose constraints you want to follow and how much say you have in formulating them. That is of course not the case and can never be the case. A medium-sized country does not reshape the world order by leaving a club it was part of. That is the fundamental lie Brexit is based on. Therefore, the necessary honesty to come up with a viable plan for post-Brexit Britain almost by definition undermines the project itself, because the project is based on hubris, which suggests that no plan is needed. One thing the first post-Brexit government that is serious about solving these issues will have to do is to assess the UK’s options realistically.

The Swiss and Silicon Valley options

It was the Sunday Times which first reported last Sunday that the government was considering to try and reduce the damage Brexit is doing by seeking a Swiss-style agreement with the EU to replace the damaging Trade and Corporation Agreement (TCA). Yet, on Monday Rishi Sunak – speaking at the Confederation of British Industry (CBI) conference, unequivocally rejected that possibility saying that an agreement based on unilateral regulatory alignment was unacceptable. Eurosceptic Tory MPs seem to attribute the source of the Swiss-style idea to Chancellor Jeremy Hunt, who voted remain in 2016. The usual paranoid incriminations about the ‘Remainer establishment’ having taken back control ensued.

I have written extensively about the Swiss-EU arrangements last year, when the Swiss government decided the halt the seven-year long negotiations with the EU over an ‘Institutional Framework Agreement’ (IFA) that would be superimposed on the over one hundred sectoral agreements Switzerland and the EU have concluded.

That IFA was a condition imposed by the EU for the continuation of the so-called ‘bilateral way’ in Swiss-EU relationships. It implied among other things, that Switzerland accepts ECJ jurisdiction over the agreement, which was one of the stumbling blocks in the negotiations. As a result of the failed negotiations, the bilateral way seems to have turned into a cul-de-sac. As a result of the problems with the ‘institutional questions,’ several bilateral agreements are already being phased out, because the EU refuses to renew them. This concerns Switzerland’s participation in the Horizon Europe research programme, but also the certification of Swiss medical products in the single market. In other areas, most notably air traffic and land traffic, the EU has shown more pragmatism and updated existing bilateral agreements despite the lack of an institutional solution, based on a clause that allows this to happen when ‘overriding interests’ are at play (GER). But even in the latter areas, the bilateral solution is increasingly under pressure, e.g. in the case of cross-border traffic of workers, where new bureaucratic hurdles now have to be overcome for Swiss locomotives and wagons to be able to enter the EU.

The main arguments against a Swiss-style agreement raised in the UK are the fact that it involves a great deal of unilateral alignment on EU rules, EU Court of Justice (ECJ) jurisdiction, and accepting all EU “freedoms,” including the freedom of movement of people (although Switzerland does have some safeguards against ‘social dumping,’ but these were precisely under pressure during the negotiations over the IFA). But even outside these specific issues, given Switzerland’s struggles with the bilateral way, it hardly seems like a model other countries could follow. Indeed, it only exists, because the EU saw it as a temporary solution until Switzerland gets ready for EEA- or EU membership.

That the EU is making life for third parties difficult by insisting on unilateral alignment of regulations and acceptance of the jurisdiction of the ECJ is a fact. Whether that stance is in the long-run beneficial to the EU itself and the European continent in general is debatable (I have argued before that the EU needs to rethink its approach to third parties). Call it bullying, or call it an economic and political union’s legitimate right to ask for compliance with its rules in exchange for access to its internal market; Either way, these facts were well-known before the UK Referendum and should have strengthened the case for remain, not for leaving the bloc.

The Swiss-style agreement having been rejected both by the PM and the Chancellor Jeremy Hunt, senior Tories then reverted back to other pie-in-the-skies solutions for the current post-Brexit disorientation. As mentioned above, Jeremy Hunt in an interview with Sky News’ Beth Rigby proclaimed that his plan now is to turn the UK into the World’s next Silicon Valley. As always with Brexiter fantasies, there is absolutely no plan behind such grandiose statements. ‘Silicon Albion’ is to happen just because of the natural greatness of Britain without any economic strategy, investment in skills, infrastructure, or indeed a supportive legal system, which – as previous academic studies have shown – are crucial to replicating the success of Silicon Valley. Such sophistication and strategy planning is not part of the Brexit project, which is entirely based on the innate superiority of Britain, rather than any realistic assessment of the potential of this country.

The rotten Tory party

In addition to the lack of plan, the lack of strategy, the lack of realism, the Tories are struggling with the rot that has spread to large parts of the party. Examples from the past couple of weeks include the growing number of formal complaints about deputy-PM Dominic Raab’s behaviour and renewed concerns about the corruption at the very heart of the Tory party around the procurement of Personal Protective Equipment (PPE) during the pandemic – with Michael Gove at the heart of the scandal around Michelle Mone. In normal times, this sort of corruption and lack of integrity from senior party members would certainly be enough to bring down a government. Not in post-Brexit Britain. The political culture in the country has declined to the extent where the public barely notices these major scandals are happening. For now, the public seem to value Sunak’s leadership – presumably for having put an end to the chaos that Truss brought onto us – and rate him higher than Starmer in terms of their capability to be PM. Still, after just a month in office, PM Rishi Sunak seem already weak and under pressure from many sides within and outside the party. These fissures in the PM’s authority will soon become a problem, as he is arguably facing some of the most dramatic challenges any peacetime British government has had to face. His frail authority will make any coherent policy on levelling up, Northern Ireland, and trade with the EU more difficult. We are two years away from the next General Election and it feels like we are in a lame duck phase already, at a time where the country needs direction and leadership more than ever. Many people’s minds are already turning to what the next – possibly Labour – government will do. Reports from this weeks CBI conference suggest that there is a lot more enthusiasm amongst the UK economic elite for Labour than for the Conservatives. To those of us who are exhausted after 12 years of Tory mismanagement of the country this will sound like good news. Yet, some of Starmer’s recent statements seem deeply worrying.

The other Tory party

The internal strife and divisions the Tory party is suffering from, and the dire economic situation would make one think that it is the time for the opposition to fundamentally change the direction of policies that got us into this mess. Far from it, Labour leader Kier Starmer seems hell-bent on trying to beat the Tories at their own game, rather than leading us out of the impasse. Not only is the Labour leader strongly opposed to unionism,  but also he is striking tones on immigration and Brexit that are barely distinguishable from Tory politicians.

At the CBI conference, Starmer stroke tones on immigration about ‘weaning the economy off immigration’ and end the UK’s ‘low pay model,’ which were virtually undistinguishable from Johnson’s arguments when he tried to convince the country that Brexit-induced labour shortages had been part of a plan to move the UK to a high skills, high wage economic model. Starmer’s pledge has to be seen in context of this week’s latest migration figure, which have reached a new record level. In reaction, the government is likely to embark on another ill-advised symbolic policy, that will aim at bringing down that number just for the sake of it. The most likely way in which the government will try to achieve that is by making it harder for foreign students to come and study in the UK by limiting the right of their dependents to move to the UK as well, and by banning what the government calls – but does not define – ‘low-quality degrees.’ This will allow the government to claim in the right-wing press that it managed to ‘control our borders,’ while doing considerable damage to yet another UK industry. Indeed, UK higher education contributes an estimated £95bn to the UK economy and employees around 800,000 people. Any crack down on foreign students – just to bring down net immigration numbers – will most likely lead to universities going out of business and/or increasing fees for domestic students to make up for the shortfall of international fee income. Rather than challenging the relevance of the single metric of net immigration or the frankly idiotic concern with students – 97% of whom leave the country again after they finished their studies –, Labour seem to accept the way the Tories are framing the immigration issue. Starmer’s statements this week also go against the explicit demand of UK businesses and are factually incorrect – as Jonathan Portes argues – in the sense that there is no evidence for a trade-off between companies’ relaying on skilled immigrant workers and training domestic workers.

Worse, still, Starmer now also blows the ‘Brexit betrayal’ horn that we are so familiar with from the pro-Brexit press and Tory party. This week, in reaction to the rumours about the government considering a Swiss-style deal with the EU, Starmer warned the government against ‘ripping up the Brexit deal,’ which not only lends credence to the quasi-conspiratory theories about Brexit having been betrayed by the ‘Remainer establishment,’ but also seems to suggest that Johnson’s TCA should not be up for renegotiation. Worse still, Starmer drew an unnecessary red line in the sand vowing not to re-establish free movement of people.

The current mess the country is in would seem like the perfect opportunity to shift back the Overton window more to the centre of the political spectrum. Twelve years of Tory policies have shown conclusively that austerity and fiscal conservatism do not work, that immigration is important for the country, and that dreams of Anglo-Saxon superiority and Empire are not a viable strategy to generate prosperity. The opposition should be bouncing all over the Tories and shouting from the roof tops: ‘Look, everything they told you about fiscal orthodoxy, immigration, and sovereignty is wrong! Here is an alternative, less toxic path to our future.’ It is a golden opportunity for someone to stand up and finally challenge the toxic right-wing discourse that has gripped hold of the Western world since the 1980s. Britain is arguably the Western country where right-wing policies have been implemented most consistently and radically. As such, it is the perfect example to illustrate that these policies are trying to address false problems with false solutions and therefore are misguided and doomed to fail. It is the country where a more reasonable centrist set of policies could be developed based on people’s first-hand experience with the right-win policies the Tories have inflicted on us for over a decade now. Britain, therefore, could be the environment in which a genuinely new discourse and political programme emerges. Instead, what Starmer is shouting from the rooftops is ‘I can to Toryism better than you!’

The tragedy is that Starmer would not even need to draw any red lines. To be sure, a clear stance on Brexit is needed so that the party, once it comes to power, has a strong electoral mandate for whatever approach the Labour party wants to take. But to win the next GE, Labour most likely does not need to pledge not going back on any of the extreme policies the Tories have adopted – including on Brexit. Starmer’s strategy of drawing red lines on Brexit and immigration maneouvers the Labour party as a whole into a corner, making it difficult to seek a serious change to the current trading arrangements with the EU.

Quite frankly I am not sure what Starmer’s Labour strategy is here. Possibly, he feels that people left of the centre of the political spectrum are so disgusted by the Tories that they will vote Labour no matter what. Hence, catering to the right wing of the Tory party using anti-Union, anti-immigration, pro-Brexit rhetoric will allow him to reconquer the pro-Brexit former Labour heartlands in the North and Midlands of England without hurting their electoral appeal in the liberal urban centres. I am not sure that strategy is going to work. What it means, de facto, is that the country will choose between three right- and centre-right parties – the Tories, the LibDems, and Labour – but there is almost no choice in England – other than the Green party perhaps – for people on the left of the political spectrum. Rather than putting pressure on the Tories from the left and the right – as would be the case if Starmer pitched his programme more to the centre-left, with the LibDems covering the centre-right ground – Starmer is creating competition on the centre-right, which ultimately may throw the next GE wide open – especially if left-wingers are equally disgusted by Starmer’s Labour as they are by the Tories and decide to stay home.

The next two years will be crucial for Britain. If a political alternative emerges that provides people with a sense of control over their lives, while being based on a realistic understanding of what is economically and politically feasible, then there is hope that the country can be turned out of the impasse it currently is in. It is disheartening that neither the government nor the opposition seems to be anywhere close to formulating a policy programme that seems fit to achieve this. Rather than building our future, there is a real risk that we continue to look for Neverwhere even after the next General Election.