Last week in Brexit Britain started with the second reading of the Northern Ireland Protocol Bill (NIPB), which by most accounts – including perhaps unsurprisingly but importantly the EU’s Ambassador to the UK – constitutes a clear violation of the UK government’s obligations under international law (‘most accounts,’ but significantly not the one of the Foreign Secretary Liz Truss who replied to a question by John Redwood about the NIPB’s legality that she could ‘absolutely confirm that this Bill is both necessary and legal’). As such, the strong support among Tory MPs for Bill (the bill passed with 295 votes to 221) and the limited outcry about a bill that is widely considered illegal and demonstrating that the UK government is acting in bad faith seemed to confirm a Brexit effect I have been blogging about for a while now: Namely, that Johnson’s government is successfully using Brexit to fundamentally push the boundaries of what is acceptable in British politics.

NIPB: Wither the liberal international order

The political dynamics internal to the Tory party governing the NIPB are complex (authoritatively summarised by Chris Grey on the Brexit and Beyond blog); But at a general level, the fact is that breaking international law does not generate enough opposition inside the parliamentary Tory party anymore to stop the government from pressing ahead.

The UK Parliament acquiescing to the fact that the UK government breaks its commitments made under international law is a stark reminder that with Brexit the UK has left the realm of ‘normal times’ and entered into a permanent state of exception where the government puts itself above the law referring to the ‘doctrine of necessity’(See BIT from a couple of weeks ago).

That is a very significant and worrying development. The modern world relies on a post-classical concept of international law that emerged as a reaction to the horrors of World War 1 and replaced the ius publicum Europaeum which governed the international order since the birth of the nation state in the 17th century. The latter was still based on a fairly absolute notion of sovereignty in the international realm, including a right to wage wars on other nations without ‘just cause.’ The post-WW1 international legal order sought to define sovereignty more narrowly and to increasingly subject national governments to the self-limiting force of the Rule of Law not just domestically but also in the international realm. This order is far from perfect. It has not prevented neo-colonial exploitation, proxy wars, and the like. Yet, at the very least, the rules-based international order imposed on governments the civilising force of hypocrisy by holding them publicly to account for the respect for certain basic norms – including the European Convention of Human Rights.

For post-WW2 generations the importance of that change in the conception of sovereignty has perhaps become fully evident with Russia’s imperialist war of aggression on Ukraine. Russia’s behaviour on the world stage is based on the concept of ‘might over right,’ which the liberal order was precisely seeking to reign in. The UK under Johnson very clearly adheres to a Russian understanding of sovereignty in international politics, where force and power not law and right dominate.

Last week started hence with a shocking example of how, under the mantel of nationalism, Britain is betraying what can be considered one of its most fundamental values, namely the respect of the Rule of Law, which – as Thomas Aubrey argued in an article on the Encompass Europe web page –  set apart 18th century Britain from literally all other European countries. On Monday, the majority of the British Parliament happily supported the government in rejecting the principle of a self-limiting force of international law and instead adhered to what increasingly seems like a self-righteous form of British imperialist unilateralism.

Yet, the week ended with a piece of Brexit news that starkly contrasts with this episode and suggests that more than a year of devastating Brexit news has started setting in motion a countermovement to Brexit. On Sunday, the FT reported that Kier Starmer would announce that Labour was ‘ready to fight Boris Johnson over effects of Brexit.’ While the 5-point plant to ‘make Brexit work’ was strongly criticised by some for ruling out a return to the Free Movement of People and Single Market membership, the plan still constitutes a very clear break with Labour’s previous strategy of treating Brexit like a taboo. Labour’s strategic volte-face illustrates just how badly Brexit is going. Indeed, the economic damage is so massive and obvious now that the fear of losing the support of the estimated 30% of leave voting labour supporters may be receding. Indeed, a countermovement seems to be happening not just in the realm of politics, but also in the public discourse on the impact of Brexit on the UK economy.

The end of the Brexit Omertà

A key evolution in recent weeks has been the increasingly broad range of commentators, politicians, and journalists who openly and vociferously acknowledge that Brexit is turning into an economic disaster. These voices are no longer limited to Remainers, but include some high-profile Brexiters. For the first time since the 2016 Referendum and especially since Johnson became PM in 2019, politicians of all colours feel able to break the ‘don’t mention Brexit’ conspiracy of silence. Indeed, some of these voices now sound outright terrified. Thus, the Telegraph’s Jeremy Warner used stark language to warn of an impending ‘currency crisis’ and even Britain defaulting on its foreign debt for the first time in history. Importantly, he attributes Britain’s economic woes to a deteriorating current account balance, driven by a decrease in exports and a ‘big leap’ in imports, which in turn he considers ‘is at least in part a Brexit effect’ and a result of ‘the flaws in Boris Johnson’s “ovenready” trade deal with the EU.’

Another more and more often mentioned very concerning Brexit effect is the continuing devaluation of the British pound sterling against other currencies most notably the US dollar (with the first six months of 2022 marking the worst run against the dollar since 2008 [@17’00”]]). This evolution has been squarely blamed on Brexit by financial professionals interviewed on BBC radio 4’s Today Programme. Indeed, even though the Euro performed badly against the dollar too, there can be little doubt that Brexit uncertainty is the main culprit for the extraordinary weakness of the pound since the Referendum. A few weeks ago, Bank of American argued Sterling was moving into emerging market territory in terms of volatility.

Superficially, the weak pound could be seen as good news for the government’s plan to turn the UK into an export economy. Yet, Chris McDonald, Chair of the UK Metals Council, explained on BBC’s Radio 4 Today programme [@17’08] the ambiguous effect of the weak pound on UK industries such as steel: While there may be a short-term beneficial effect on exports, which become cheaper for foreign buyers who pay in dollars, raw materials such as iron ore and imported energy on which the UK steel industry relies heavily become more expensive, potentially off-setting any positive effect.*

The weak pound also contributes to the UK’s soaring inflation. Laura Foll at Janus Hendersons Investors, interviewed on the same programme [@20:30], left no doubt that the fall of Sterling against Dollar falling from a long-term average of 1.50 to 1.20 is the result of Brexit. Since Brexit the UK economy has lower growth prospects, higher trade frictions, and lower labour market flexibility, which leads to higher imported inflation.

More important perhaps than the substance of these economic analyses is the fact that the BBC spent most of its economic section on Today talking about the negative impact of Brexit. In fact, the UK’s economic outlook now looks so dire that even the Murdoch press can no longer deny it, as former Conservative deputy PM Michael Heseltine argued in the Guardian.

The start of the political countermovement: Labour’s volte-face

The past week ended with a piece of Brexit news that starkly contrasts with this episode and suggests that more than a year of devastating Brexit news has started setting in motion a political countermovement to Brexit. On Sunday, the FT reported that Kier Starmer would announce that Labour was ‘ready to fight Boris Johnson over effects of Brexit.’ While the 5-point plant to ‘make Brexit work’ was strongly criticised by some for ruling out a return to the Free Movement of People (FMP) and Single Market membership, the plan still constitutes a very clear break with Labour’s previous strategy of treating Brexit like a taboo. Labour’s strategic volte-face illustrates just how badly Brexit is going. Indeed, the economic damage is so obvious now that the fear of losing the support of the estimated 30% of leave voting labour supporters may be receding.

Indeed, in light of the emerging consensus that Brexit is not working, it may come as no surprise that Labour finally decided to come off the fence and present its strategy for Brexit. In a context where around 49% of the population think Brexit was a mistake, starting to attack the government on its delivery of Brexit makes good political sense. What is perhaps more surprising – and disappointing to many – is that the five-point plan does not include re-joining the Single Market – let alone the EU  – as part of the plan.

Clearly, Starmer and the Labour strategist still seem to prioritise regaining the heavily leave-voting ‘Red Wall’ constituencies in the North and Midlands of England over appealing to more urban and younger voters. That strategy comes with some risks, most importantly that on the Brexit issue, Labour will be outflanked by the LibDems who have adopted a much clearer ‘re-join’ strategy. Starmer’s key concern seems to be that his past stance on a second referendum may make him an easy target for the Conservatives in the next General Election to portray him as a crypto-rejoiner. That may certainly explain the very strong and clear language Starmer chose to exclude any re-joining the EU under a potential Starmer Premiership: “With Labour, Britain will not go back into the EU. We will not be joining the single market. We will not be joining a customs union. We will not return to freedom of movement to create short-term fixes.”

To be sure, many Remainers will be disappointed by this cautious and lukewarm attitude and will object to the slogan ‘make Brexit work’ as a matter of principle. Yet, like I argued back in November, it may it still make political sense for Labour to not explicitly campaigning on re-joining, but rather on improving the current Brexit arrangements. For anyone competing against what will most likely be a Brexit Ultra as Conservative candidate for PM it will be enough to insist that hard Brexit is not working and alternative solutions are needed. Whether, when, and how that does or does involve rejoining is certainly not a question that the next government will have to answer during its first term. Some strategic ambiguity on the issue is hence appropriate here. Whether Starmer had to be just as explicit about rejecting the possibility of SM membership and FMP is another question. While this may attract some Red Wall working class votes, it may push younger, urban Labour voters in the arms of the LibDems. From a non-partisan perspective, however, Labour not campaigning for rejoining may make the next GE more difficult for the Tories who will not be able to portray themselves as the only ‘anti-rejoin party.’ Instead, they may face the same dilemma they faced in the last two byelections where anti-Brexit Blue Wall voters turned to the LibDems while pro-Brexit Red Wall voters returned to voting Labour.

The rats are leaving the sinking ship

All these political strategies may become more than academic reflections soon. As I am typing these lines, news reach us about the fallout from the latest scandal involving the PM – Pinchergate. This time Tory MP Chris Pincher stepped down from his role as deputy chief whip – although refusing to resign as MP – over what sounds like an alcohol-fuelled sexual misconduct mid-week last week. Once again Johnson’s good judgement is in question for having appointed Pincher to a position of overseeing the behaviour of other MPs despite his chequered track record of inappropriate behaviours in the past. Once again Johnson has tried to wiggle his way out of the scandal by first telling what looks like a lie about how much he knew about previous allegation of sexual misconduct against Chris Pincher, and then retracting and instead saying that he had forgotten about being informed about them.

Within the last couple of hours, both Health Secretary Sajid Javid and Chancellor Rishi Sunak as well as vice-chair of the Conservative Party Bim Afolami – together with several aids and junior ministers – have resigned from their positions. Most observers seem to agree that it will be extremely difficult for the PM to recover from this blow. The BBC cites one ‘close ally’ to the PM as saying ‘it will all be over by this time tomorrow.’

The looming end of PM Johnson reinforces the feeling that we are about to enter a new phase of Brexit. The developments over the past week – Labour finding the courage to take a stance on Brexit (albeit a rather cautious one), more and more right-wing outlets and politicians acknowledging the failure of Brexit – make one hopeful that this new phase will see a more honest debate about Brexit emerge. One that is concerned with reality rather than fantasies.

A key open question, of course, is who will replace Johnson as PM. The bookies’ favourites seem to be Rishi Sunak, Penny Mordaunt, and Liz Truss with Jeremy Hunt also considered by some as a potential candidate. While Mordaunt has a track record of pro-Brexit campaigning – including lying about a UK veto on a potential membership of Turkey –, Truss – an erstwhile Remainer – has spent the past weeks desperately trying to proof her Brexiteer credentials by becoming more and more intransigent on the issue. Sunak would certainly be more pragmatic – not to say opportunistic – on the issue, but would possibly push hard on the de-regulatory aspect of the Brexit project, which may make solutions to current Brexit issues (such as an agreement on Sanitary and Phytosanitary Rules, as Labour promises) more difficult, because most of them will require some regulatory alignment. Hunt, also a Remainer before the 2016 Referendum, would probably be the softest Brexiter of those seen possible candidates to succeeding Johnson, which would potentially make Starmer’s new Brexit plan less distinct and effective electorally speaking.

If a more extremist Brexiter succeeds Johnson, Brexit as a fantasy may persist for some more time. Indeed, while The Mail and other pro-Brexit outlets have started reporting more critically about Johnson’s Brexit, The Sun is reigniting the culture war aspect of it. Last week, the paper launched a ‘Remoaner Watch’ web page where anyone who is suspected of ‘Remoanery’ – i.e. any activity seeking to mend our relationship with the EU and addressing the pressing issues created by the UK’s departure from the bloc – is listed and denounced. If a Brexit Ultra becomes the next PM, they would most likely double down on such strategies, because the economic case for Brexit has become practically impossible to make.

That would only delay the inevitable, however, which is that eventually Brexiters will have to say goodbye to their fantasies of ‘sovereign,’ ‘Global Britain’ and start working towards a different (closer) post-Brexit arrangement with the EU. Whether or not that necessarily has to mean Single Market membership as some argue or even re-joining, is not the most important question at this stage. The most important one is whether the developments we have witnessed in the past week are transient or signs that a genuine, broadly-based countermovement against the pernicious movement that brought us Brexit has finally set in. If it has and if it gathers pace, there may be an opportunity for the UK to get back on track after more than a decade on a road to nowhere.

 

 

* The steel industry illustrates another Brexit government misunderstanding of the modern global economy: the government’s decision to maintain Trump-era tariffs of 25% on steel imports, may protect some British steel exporters, yet, as people from the industry pointed out on Today [@6’20”] last week, many downstream companies in the UK  depend on steel imports from the EU. For them, the import tariffs make production more expensive and constitute a competitive disadvantage. The simplistic understanding of international business underlying Brexiter thinking does not take into account such nuances.