In some sense Brexit is all about borders. The call to ‘take back control of our borders’ was front and centre in the Brexit campaign in 2016. Fundamentally, Brexit is a project that seeks to re-establish borders in the name of an outdated understanding of (territorial) sovereignty. And yet, it is precisely in terms of borders that the Brexit project is failing on literally all fronts. Indeed, if we conceive of a territory as being delimited by four kinds of borders that regulate the flows of people, of goods, of services, and of capital from one territory to another, it becomes increasingly clear that Brexit Britain’s borders are botched in all these areas.
The People border – Refugees, migrant workers, and travellers
Brexiters like to think of the UK as ‘world leading’ in whatever it does. In terms of its response to the refugee stream from Ukraine, it is world leading in falling behind. When BBC’s Mark Easton confronted the Home Secretary with the fact that the UK has issued roughly ten thousand visas to Ukrainian refugees, which compares to Germany’s 300,000 for instance, all she could say in response was that the UK had to carry out security checks because it was a third country while the EU did not. That seems like an absurd claim, given that Ukrainians are not EU citizens and therefore their treatment when entering either Germany or the UK has nothing to do with the EU. But it goes to show that the Home Secretary either does not understand the situation, or – more likely – she thinks the UK public is ignorant enough to buy whatever absurdity she may come up with.
Anyone who has ever had to deal with UK Visas & Immigration (UKVI) will not be surprised about the slow, chaotic, and inhumane way of dealing with visa applications of Ukrainian refugees. I have personally witnessed many times the anxiety and stress the Home Office puts foreign academics and overseas students through before they get the right to work or study in the UK. Poor customer service, technical issues like losing digital fingerprints, and delays in processing visas so that people have to delay the start of a new job – at considerable personal financial costs – make refugees and immigrants’ lives miserable. Of course these issues are not simply the result of incompetence and underfunding, but part and parcel of the Tory’s ‘hostile environment’ strategy towards immigration. The hostile environment strategy pre-dates Brexit, but by ending free movement of people for the nationals of the 27 EU countries, Brexit has massively increased the number of people who are subject to this treatment.
Priti Patel’s restrictive points-based immigration system together with the harassment-bordering treatment of visa applicants by UKVI certainly explains why EU workers are staying away even after the pandemic. Staff shortages in hospitality are well-known and continue to plague owners of restaurants. Similarly, the Parliament’s Public Accounts Committee noted in a new report estimates that for the agricultural sector alone, in August 2021, “the number of vacancies was estimated to be 500,000 out of 4.1 million roles in the sector.” This includes not just vegetable and fruit pickers, but also vets and abattoirs workers. Amongst other devastating effects this situation has had for UK farmers, the Committee lists the fact that 27,000 pigs had to be culled and binned, which seems even more shocking when considering – as Russ Jones did – that at the same time the country has £2.5m people using foodbanks.
As the pandemic ebbs and people start travelling again, staff shortages were painfully exposed at UK airports and ports. This is a result of staff leaving or being laid off during the pandemic and airports “struggling to recruit and train new staff quick enough to cope with demand, leading to staff shortages and delays at check-in and security.” As such, it is not Brexit alone causing these delays. For instance, German airports too report staff shortages of 20% and are expecting long waiting times over the Easter weekend. But in the UK Brexit has contributed to the problem. Even the BBC did not manage to entirely avoid talking about Brexit in an article on flight cancellations, which result not only from the fact that ‘other jobs were tempting workers away’ but also that ‘some European Union nationals had left after Brexit.’ So, the impact of Brexit here is not that the UK experiences staff shortages while EU countries do not. Rather it is that the problem will be more severe in the UK and be more difficult to address than in EU countries.
To be fair with Brexiters, these issues with the people’s border are not necessarily unexpected negative impacts of Brexit. Rather, some of them were part of the plan to make foreigners’ lives in Britain as miserable as possible. The seemingly unexpected element is that borders cut both ways and the negative consequences of ending free movement of people are now also affecting British citizens. But by and large, a Brexiter, while complaining about delays to their own holiday trip, may very well be quite pleased with the chaos that currently reigns in the UK visa and immigration system.
The trade border – trade in goods
More striking and problematic than flight cancellations and delays at airports are the lorry queues at Dover and other UK ports. The pro-Brexit explanation of these queues is simple. The BBC for instance simply states that “at Dover, the suspension of P&O ferry services and bad weather have also caused delays.” David Frost, in an article in the Telegraph, more explicitly rejects any link to Brexit by stating that rather than by Brexit “delays at Dover [are] caused, in fact, by the withdrawal of P&O ships.”
The easiest way to rebut Frost’s explanation is simply to point to the flawed chronology. The lorry queues at Dover have been a problem at least since January 1st, 2022 – the sacking of P&O works took place on March 17th, 2022. So the emergence of the queues pre-dated the sackings, but it coincided with the introduction of new customs checks on January 1st (Also, the weather in Dover back in January was not bad by British standards!).
This is not to say that everything that’s going wrong in the country is due to Brexit. P&O ships not running, and storms do of course affect channel crossings. The point, however, is that Brexit does constitute an important contributing factor to the border delays we are seeing. At some level, Brexiters now accept that. As reality gets harder to deny and the problems simply do not go away, Brexiters now consider extreme solutions, such as simply not carrying out any border checks on goods imported into the UK. Indeed, the latest decision to delay the introduction of full import controls on food and plant products has come with some suggestions that this may become a permanent solution. There are also Brexiter economists - like Patrick Minford – who in all seriousness try and make an economic case for such unilateral trade liberalisation.
In reality, of course, unilaterally giving up controls over borders potentially comes at a huge price. Frank Dunsmuir, head of international trade and customs at Fujitsu who hosts the CHIEF customs declaration system, estimates that the delay in implementing customs declarations between January 1st, 2021 and July 2021 may have cost HRMC as much as £30bn in missed VAT income. There are also a myriad of risks associated with diseases – both animal and human – (again Chris Grey’s blog this week provides a very in-depth analysis of this aspect). There is also the issue that the laxer UK import controls, the less other countries will trust that goods circulating in the UK and therefore the harder it will become for the UK to gain access not just to EU, but also to other countries’ markets.
At the same time, Britain – who, remember, ‘holds all the cards’ – simply cannot afford to introduce full veterinary and food checks on EU imports, because it may very well lead to a collapse of supplies as the industry body Cold Chain Federation warns. Some experts doubt import checks would stop large EU exporters from exporting to the UK. Still, as Peter Foster points out, the concern that the UK might face problems with food supplies is great enough for UK industry bodies to even abandoned their plea for a ‘level playing field’ for UK and EU food producers. They are now willing to accept a one-sided arrangement where EU exports into the UK are not checked, but UK exports to the EU are. Remainers could not have dreamt of a better illustration of the absurdity of Brexiters’ ‘taking back control’ claim and of the Brexit government’s incompetence in delivering on the unicorns it promised!
The only other solution Brexiters have to offer is that world-leading ‘smart border’ by 2025, i.e. technical solutions that makes physical borders unnecessary, replacing them with electronical checks away from the border. The problem of course is that the way in which the UK government has handled the implementation of new border arrangements since Brexit, gives little cause for optimism that such a smart border can be made to work in the next three years. The latest example of a botched border arrangement is the post-Brexit Goods Vehicles Movement System (GVMS), which lorries transporting goods from GB into the EU have to register with and use to fill in customers declarations. That system has been down for days now, adding to the costs and delays exporters are facing. Indeed, the parliamentary Public Accounts Committee considers the 2025 target ‘optimistic, given where things stand today and we are not convinced that it is underpinned by a detailed plan to deliver’ (p.27).
The Irish Sea trade border
Arguably, the most botched Brexit border of all is the one in the Irish Sea. Any issues resulting from the Northern Ireland Protocol (NIP) are of course highly politicised, but it is undeniable that the NIP has led to various new barriers to trade between GB and NI. The Tory right is stepping up pressure again for the government to trigger Art. 16 and thus suspend parts of the NIP (which will solve nothing). Yet, the fact is as many people have noted over and over again, there simply is no solution to the ‘Irish trilemma’ – i.e. you can have two out of the following three things: Leaving the Single Market/Customs Union; no hard border on the island of Ireland; and a whole-UK approach to Brexit. The NIP sacrifices the latter. Johnson and his Brexiter crew new that – or should have known that – but are now behaving as if there was an acceptable alternative that would not mean the return of a hard border between Ireland and Northern Ireland. That is an illusion. David Frost – erstwhile architect of the NIP – seems to move towards acknowledging that by insisting that there is a border on the Island of Ireland. Yet that bit of realism from Frost does of course not make the trilemma go away and the return to a physical border on the Island of Ireland remains an unacceptable solution for the EU.
Trade border - trade in services
In terms of borders, the elephant in the room remains trade in services. Incredibly, trade in services – one of Britain’s key areas of economic strength – was completely neglected in the negations of the Trade and Cooperation Agreement (TCA). Brexit negatively impacted UK services exports already before Brexit had actually happened, with one study estimating the effect to be a fall of £133bn between the 2016 Referendum and 2019 – nearly 10% of the UK’s service exports. Now that the pandemic is easing, service exporters start feeling the serious impact of Brexit in full.
Here the key Brexit blunder is the neglect to include a ‘mobility chapter’ in the TCA. This makes it difficult for UK service exporters to send workers to EU countries to deliver services there. Peter Foster speaks of up to 1000 EU and members-state level restrictions. This will impact especially smaller companies as well as independent artists and musicians, as even David Frost acknowledges (although, of course, he blames the EU for it).
Capital borders
The – invisible – borders regulating the flow of capital from one country to another are not often discussed in relation to Brexit. That may be, because Brexiters do not want us to take notice of them. It is hardly an exaggeration to see the Brexit movement as part of what Susan Webber (aka Yves Smith) – founder of Naked Capitalism – calls a “finance-led counter-revolution” that aims “to reduce the bargaining power and pay of ordinary workers relative to investors and elite technocrats.”* It is indeed well document and clear beyond any reasonable doubt that Brexit was supported by the same super-rich financiers who supported other right-wing populist movements. It is also clear that for these super-rich, support for right-wing populism is not merely an ideological project alone, but also serves their material interests. By supporting superficially patriotic, right-wing populists, these financiers buy the loyalty of politicians who put in place a regulatory system that provides for tax havens and ample opportunity to make money through political connections (see for instance the PPE scandal).
The revelation that Chancellor Sunak’s wife Akshata Murthy had non-domicile status in the UK, which allowed her to avoid paying UK tax on foreign incomes, provides only the latest illustration how this group of footloose rentiers abuse the system. Most importantly, Murthy does not pay any UK tax or NI on her nearly £12m yearly dividends on her stake in Indian Software company Infosys. For HRMC that means a yearly loss of income of around £5m and £250k in NI. Legal institutions like the non-dom status – a century old feature of British tax law but reformed under Chancellor Osborne – constitute key tools for the super-rich to remain non-taxable by and non-accountable to nation states. Like many others before him, ex-banker Sunak has used his political positions to rigorously pursue strategies that allow him and people like him to enrich themselves on the back of working people. The Chancellor’s priorities are clearly illustrated by the real term cuts to universal credit, pensions, and the increase in National Insurance, while no windfall taxes on profits of oil companies are considered.
The rentier interests also become clear in the fact that the Johnson government ruthlessly is selling off anything that is still state-owned in the UK (most recently the announcement that Channel 4 will be sold off). The government also practices an open border for capital when it comes to takeovers of UK firms. That is despite the fact that recent security concerns about Chinese investments in technologies (e.g. the removal of Huawei from the UK 5G network) have led to a new National Security Investment Act. While the government takes a stand against Chinese investors when it seems politically appropriate (e.g. in the case of Huawei and 5G, where the US had adopted a similar approach), when none is watching the government continues to allow the flogging off of potentially sensitive British companies to foreign investors. Most recently, the Welsh chip manufacturer Newport Wafer Fab was bought by a Chinese firms. Therefore, when it comes to cross-border capital flows, the Brexit movement stands for murkiness and openness, not taking back control.
Can Britain’s borders be fixed?
The short answer to this question is of course they can! What stands in the way of working towards that goal, however, is Brexiter denial and dishonesty.
Given the irresistible weight of reality, we now hear Brexiters say that ‘no sensible person would deny that leaving the single market and customs union has some effect on trade in the short run’ and that we always knew ‘that a change in trading relationships with the EU would cause a hit to the UK economy.’ Except, of course, denying this is precisely what Brexiters have done for the past five years when promising frictionless trade and a Brexit with no downsides. As Nick Tyron aptly put it this week, for Brexiters “[e]very problem created by Brexit either does not exist or if it does, it’s not our fault.”
David Frost for instance continues to deny any suggestion that trade has been impacted by Brexit. Claiming instead – like Rishi Sunak did last week – that it is impossible to tell given the confounding factors of the ‘pandemic, trade re-routing, and methodological change’ Trade experts, of course, disagree as the impact of Brexit is so strong that it is becoming increasingly easy to see the stark difference in trade performance between Brexit Britain and other countries, including Germany.**
Brexiter dishonesty about the new borders goes further. Brexit Opportunities Minister Jacob Rees-Mogg has now started to deny that non-tariff trade barriers are the logical and necessary consequence of the type of Brexit Johnson’s government has chosen. Instead, he shifts the blame onto the EU. In an interview on LBC – reported on Nick Tyrone’s blog – he replied to a fisherman named Robin complaining about the non-tariff barriers by saying that ‘I accept Robin's point that the EU is applying non-tariff barriers to make life difficult for British fishermen but that is because of the doctrine of the European Union, not because of the doctrine of the UK government.’
This, of course, is a completely false interpretation of the facts. The EU’s ‘doctrine’ was perfectly compatible with avoiding non-tariff barriers by allowing the UK to stay in the Single Market and Customs Union. But of course, the UK would have had to accept the necessary condition for SM/CU membership, namely regulatory alignment.
This continuing lack of honesty and realism makes it impossible for the government to effectively address any of the current border problems. Brexit’s impact on the UK trade border is the fundamental reason for the lorry queues in Kent. Acknowledging that is a crucial first step to then try and find a better solution than the current one. Modern borders are complex institutions that connect complex economic systems. The impact of Brexit on this complex system is complicated and multifarious as Chris Grey shows in meticulous detail in his Brexit & Beyond blog post this week. The simplistic nature of the Brexit project means that a government guided by Brexit as its only lodestar, is very badly equipped to address any of these challenges. It therefore would seem that a change in government – or at least in PM – will be needed for any of these border issues to be solved.
Brexit politics
Despite the – to me – obvious botched handling of Brexit by Johnson’s government, 28% of people surveyed by Ipsos this month still consider Brexit to have a positive impact on the UK economy. That contrasts with the 45% who think it has had a negative impact. Yet, if we add the 22% who consider it has had no impact at all, a clear majority of 50% do not consider Brexit to be a problem for the UK economy. This certainly reflects the success of the government and the pro-Brexit media in attributing the cost-of-living crisis and other economic issues people are facing to all sorts of reasons (the war in Ukraine, the pandemic) without acknowledging the role of Brexit. In other words, the governments diversion strategy, and the fact that Brexit has coincided with other truly historical events allows Brexiters to eschew responsibility.
That creates the conditions for Brexit becoming a mythical background event that people do not associated with any real-world outcomes. The same Ipsos poll shows that the approval ratings of key Tory figures in government are falling. So, people do not seem particularly happy with the government, but they are being judged not on delivering Brexit but on other things that people do not associate with Brexit.
The disconnect of Brexit from the realities of its impact may serve the Tories’ strategy to campaign on Brexit in the next election. If people do not associate their current economic grievances with the way in which we left the EU, the Tories will be able to campaign once again on mostly ideological aspirational themes of ‘sovereignty,’ ‘independence,’ ‘anti-woke’ and – let’s face it – English/British supremacy. That may be the only way to hold together the disparate coalition that voted Tory in 2019, which ‘had more in common on cultural issues than on economics’ as David Gauke puts it.
Johnson’s suggestion this week that Kier Starmer is the person who would take us back into the EU indicates that the Tories are serious about making the next GE campaign another battle between ‘Remainers’ and ‘Leavers,’ rather than one about the economic realities people are facing.
In that context, the opposition should resist the temptation to be drawn into a ‘keep Brexit done’ v. re-join debate. Reality is firmly on the side of Remainers. The more people’s economic grievances become undeniable, the easier it will be of Labour to simply point to the botched job the Johnson government made of Brexit and to attack the Tories for being the ‘high tax, low growth’ party. Whether or not re-joining is the right solution to fix the mess Johns has created should not be at the centre of the campaign. ‘Making Brexit work’ may not be a good slogan for Labour – because it puts off many Remainers, but the fact is that – whatever we call it – whoever is in government after the next GE needs to urgently fix our third country relationship with the EU.
A recent excellent study by Richard Bentall and colleagues shows that a middle-of-the-road strategy on Brexit may indeed be the most likely strategy to win the next GE. The study shows the difference in answers when you ask people if they want to re-join or remain outside the EU and the answers to the question whether Brexit was the right or wrong decision. The difference is striking. The country remains split into two camps of pretty much equal size in the first case (38% re-join vs. 39% stay out), but a majority (48% vs. 38%) says it was wrong to leave, 59% (vs. 30%) say the government is handling Brexit badly, and 52% (vs. 17%) say Brexit is not going well.
Bentall’s explanation is that the Remain/Leave divide has become a matter of identity rather than policy preference, which makes it very unlikely people will change their opinion on that issue. As a result, Prof. Bentall and his team suggest that the best electoral approach to Brexit is one that does not defend either ‘Brexit at any cost’ or the ‘reverse Brexit’ alternative, which both trigger people’s ‘Brexit identity.’ Rather, an intermediary strategy that promises a pragmatic ‘New Deal with Europe’ – maintaining independence but pragmatically collaborating more closely with the EU – is the one that most people – Remainer or Leaver – find acceptable. That strategy is close to, but not the same as ‘Make Brexit Work,’ in the important sense that it would be explicit in pointing out the fact that the government’s Brexit is failing on all fronts but would not commit to re-joining as the only way to fix Brexit.
That strategy is not without risks. Labour may lose some staunch Remainer votes. More importantly, perhaps, accepting Brexit as a matter of fact (we have excited the EU) should not be equated with accepting Brexit as a political project. The fact that Brexit was achieved through an illegitimate referendum campaign that broke electoral law cannot go unchallenged if British democracy is to be protected from ongoing and future attacks. But again, that does not mean the answer should be a campaign based on the promise to re-join. Such a campaign would trigger Brexit identities and may very well lead to another victory of the ‘Leave’ side in a situation where the country remains split pretty much 50-50. Therefore, to take back control over the government, Remainers may have to accept the new Brexit borders for now in order to be able to fix them later.
*Many thanks to Bill Maslen for sending me this quote, which I hadn’t seen before!
** To be fair with Frost, he does attempt to engage with some of the more substantive aspects of Brexit’s impact on trade, namely the OBR estimation that by 2030 UK productivity will be 4% below what it would have been without Brexit. Frost the ‘economist’ rejects the claim that higher trade leads to higher productivity arguing – wrongly – that the link between the two ‘is often based on evidence from emerging markets or ex-Communist economies’ and pointing – rightly – to the fact that ‘the UK's own trade openness has grown since the financial crash, but productivity has not.’
The link between trade and productivity is not uncontested amongst economists, but when using a solid measures for productivity and trade-openness and controlling for all relevant factors it is pretty robust across all countries, not just emerging economies.
More specifically regarding his claim that UK productivity has not increased despite greater trade openness, this is most likely explained by the large (excessive?) role that non-tradable services play in the UK economy. Productivity gains are much harder to achieve in these types of services (Baumol’s disease) than in manufacturing and other high-value added activities. Therefore, due to its industrial structure, which – as a result of deindustrialisation since the Thatcher period – is tilted towards non-tradeable services, Britain will on aggregate benefit less from trade openness in terms of productivity increases than more manufacturing-focused countries.