Professor Chris Grey’s analysis on how the budget aftermath exposed the costs and the lack of public consensus for Brexit. Some of the revived debate repeats the past, but there is a new context. How Labour responds now is crucial.
First published: Dec 2022.
T here has been a palpable change in the last week. Brexit is suddenly being more widely talked about again, and not just talked about but questioned and criticised. Despite having scarcely been mentioned in last week’s ‘budget’ statement or Labour’s response, it was that budget which was the spark, although the tinder was already there in the things set out in my piece of 4 November.
Why is Brexit being talked about again?
In brief, I suggested that four factors were coming together.
First, the Liz Truss mini-budget had tested almost to destruction the theocratic Brexiter idea that belief could trump reality and the nationalist Brexiter idea that the UK was strong enough to buck what they call ‘the global Establishment’. At the same time, it made economic growth central to defining what Brexit was supposed to deliver.
Second, the disastrous collapse of the mini-budget and, with it, the Truss premiership, brought Rishi Sunak to power on the sole basis of his supposed economic competence and realism.
Third, this happened against a background where opinion polls show ‘the economy’ to be by far the biggest issue of concern to the public.
Fourth, it happened against the background of opinion polls which for many months have shown a growing majority for the view that Brexit was a mistake, and a majority view that Brexit has been economically damaging.
It was thus highly likely that once the delayed Budget statement occurred these things would coalesce around the question of how can the government claim to be economically competent and realistic, and how can it promote growth, if it does not address the economic damage of the unpopular policy of Brexit.
This is exactly what has happened last week, and it has been given added bite by a fifth factor, namely the way that George Eustice’s comments last week finally opened up for debate the inadequacy of the Brexiters’ sole claim to an economic benefit, that of making independent free trade agreements. With that has come a realization that Brexit Britain’s ‘trade honeymoon’ is over, though the red herring of CPTPP membership still lingers.
Although some media coverage talks as if the issue of Brexit has suddenly re-appeared, the truth is that it has never gone away, as anyone reading this column regularly will know. Whilst media and political attention may have been much reduced, the reality is that neither leaving the EU, nor the Trade and Cooperation Agreement (TCA) that followed, provided a sustainable resolution to the Brexit debate.
The Brexiters’ political failure
That is partly because of the economic damage but, more fundamentally, because the Brexiters have totally failed to build a political consensus for Brexit. Even now, the only thing they can point to as the basis for such a consensus is the 2016 referendum result. But that narrow victory should have been only the beginning. If they had been serious about embedding Brexit as the new, accepted reality amongst a sustainable and growing majority of people they needed to show that it could work, and also to reach out to those who had opposed it.
Instead, they were not only unable to show it could work but, in many cases, actively decried what was being done as ‘not real Brexit’ whilst at the same time expecting those who had never believed in it to be persuaded to accept something they, themselves, were criticising. As for reaching out to opponents, they simply made no attempt at all. Only ‘true believers’ were regarded as having any right to shape Brexit, whilst remainers were treated with contempt. And so, quietly, and without much political leadership or media attention, opposition to Brexit has hardened amongst almost all of those who had always opposed it whilst the growing evidence of its failure reduced the number who supported it, with 20% of those who voted leave now regretting it. In short, the Brexiters won the referendum, but have failed to ‘seal the deal’ with the British people.
The aftermath of the budget
Now, in the aftermath of the budget, that is coming back to haunt them. Crucially, what is happening is not just a revival of ‘remainer’ criticisms. The pro-Brexit Telegraph is awash with articles bemoaning the “squandering” of Brexit and of its “failure to deliver” benefits, to the point of recognizing that it might even be reversed. As for the Express, that other bastion of the true believers, it has recently gone remarkably quiet about Brexit. But, even there, an article by Tim Newark last week pronounced that, with the demise of Truss, “Tory MPs blew their one chance to re-commit to Brexit”.
Most strikingly, in an article in the Mail, veteran political journalist Andrew Neil wrote that “this is the week that Brexit died”. Neil has never declared how he voted in 2016, or whether he voted at all and, to be fair, his interviewing of Brexiters has generally been as robust as it has been of anti-Brexiters, although the tone of his writings does suggest a certain sympathy for Brexit. But, if anything, that gives an added authority to his remarks which, broadly, argue that leaving the EU was “supposed to create a post-Brexit, low-tax, low-regulation, free-wheeling economic environment” and has not done so.
It is not a new critique. The free-market right have been making it for at least a year. The difference now is that the Truss government, which vowed to deliver this version of Brexit, collapsed, and that the Sunak-Hunt budget shows, as Neil and Newark argue, that it will never be delivered. There is a deep flaw in this argument, of course, because neither this nor any other specific version of Brexit was ever proposed at the time of the referendum and nor was it at the 2019 General Election. What these right-wing ‘Singapore’ Brexiters tried to do was to use Brexit as a cover to deliver an agenda which no one was ever asked to vote on, and which it is unlikely a majority would have voted for had it been presented to them.
So, again, it shows the failure to build a political consensus, this time not just for ‘Brexit’ but for their version of Brexit, perhaps because they knew that no such consensus was attainable. In passing, I have never been convinced by the argument of some people who oppose Brexit that ‘low-tax, low-regulation Brexit’ was the ‘real agenda’ all along. Of course it was, by definition, the agenda of those many and powerful Brexiters who wanted that form of Brexit. But to say it was ‘the real agenda’ of Brexit is actually to concede to them the wholly dishonest idea that this was the true and necessary meaning of Brexit.
If one strand of the budget aftermath is right-wing Brexiters bemoaning that they will never get the extreme form of Brexit they wanted, the other strand is to re-open the question about whether the form of Brexit we have is too extreme. This was in evidence in the rumours that surfaced last weekend that the government was considering seeking a ‘Swiss-style Brexit’ for the relationship with the single market. Inevitably that also opens the door to the entire question of Brexit itself, especially given the polls showing clear public opposition to it.
Thus, to take a high-profile example, Piers Morgan – a remainer in 2016, but one who has hitherto been vociferous in arguing that Brexit should go ahead because of the vote – forcefully made the obvious point that “Brexit has been a disaster” and called for a referendum on re-joining. Arch-Brexiters like John Longworth may protest that “there should be no discussion now about EU membership” but to no avail. It is being discussed and it’s likely to go on being.
Back on the endless Brexit doom-loop?
Whether this revived discussion is a sign of moving forward is a moot point, however. The reports about moving to a ‘Swiss-style Brexit’ suggested that, even after all these years, quite basic things about Brexit are still not understood. Thus “senior government sources” apparently still believe that it would be possible to have Swiss-style Brexit without freedom of movement of people, and that the UK could get such a deal “because it is overwhelmingly in the business interests of both sides”. So here we are again, with the same old refusal to understand the single market and its inseparability from freedom of movement, and what is in effect a reprise of the ‘German car makers’ argument. It’s truly pathetic.
And that is even before considering that the Swiss model of multiple bilateral agreements with the EU is one that the EU itself regards as cumbersome and unworkable, would never be entertained with Switzerland were the relationship starting again now, and would not even be considered as a basis for EU-UK relations. Indeed, one of the core EU positions from the beginning was that the TCA would contain, in one architecture, the entirety of the post-Brexit arrangements, rather than making piecemeal deals. That certainly isn’t going to change now.
In any case, Sunak quickly disowned these reports, and he and Jeremy Hunt seem now to have the idea that post-Brexit barriers to trade can be reduced within the TCA framework. There is indeed some scope for that, although, at most, it is a limited scope, certainly not amounting to anything remotely like the “unfettered trade” Hunt has spoken of. That scope will be reduced to the point of non-existence if, as he pledged last week, Sunak maintains the UK ‘red lines’ of refusing not only freedom of movement, but any role for the ECJ and any alignment with EU regulations. This also seems to bode ill for the ongoing Northern Ireland Protocol negotiations where, astonishingly, it is now reported that Steve Baker’s plan is to revisit the ‘sequencing’ row of the summer of 2017, which David Davis lost. So, once again, we seem to be going round in circles.
Needless to say, all this gave the hard Brexiters a fit of the vapours, with a ‘new Tory civil war’ threatened and a revival of all the tired old talk of Brexit ‘betrayal’. In the process, there was a reminder of precisely the cultism with prevented them from building a consensus, with a “senior Tory backbencher” saying that “I and many of my colleagues have never regarded Rishi as a true Brexiteer”. Meanwhile, remain-voting Hunt was called on to “personally deny” the rumours, as a heretic might be called on to publicly recant. Outside the Tory Party, Nigel Farage made his habitual threat to ‘return to front-line politics’ if the government were to seek to ‘betray’ Brexit with a Swiss-style deal (he has apparently forgotten all the times he advocated such a model).
These reactions can also be seen as a re-hash of all the debates since 2016. They show that, even if Sunak is genuinely an ‘economic realist’ who can see the damage Brexit is causing, he, like any Tory leader, is hamstrung by the fanaticism of the Brexit Ultras in his party, a fanaticism which far from having been assuaged by Brexit has been inflamed by it. Equally, they show how, despite the idea that Brexit would kill off the external threat to the Tory Party from Farage, he continues to have the capacity to scare, and hence to control, it.
But this time is different
However, despite their familiarity, what is happening now is more than simply a re-run of old myths and old arguments. Before Britain left the EU, it was still possible for Brexiters to promise Brexit benefits and to decry ‘Project Fear’. Now, although they still try to do so, there is more than enough evidence to see the realities, especially the economic realities, of Brexit. That includes the evidence that the central premise of Brexit as regards trade – that increased trade barriers with the EU would be more than off-set by growing trade with non-EU countries – has been discredited.
In short, Brexit is no longer hypothetical and that, in principle, makes a rational discussion of its economic consequences easier or, at least, ought to make an irrational discussion more difficult. That is made more so by the collapse of the Truss mini-budget because it so manifestly discredited the Brexiters’ claims that economic reality could be wished away, as the province of the ‘remainer Establishment’. Relatedly, the fact that the ‘intellectual’ basis of the mini-budget came from precisely the same group of economists who provided the economic case for Brexit itself has served to further undermine that case. Whenever their fantasies meet reality they fall apart.
And this extends beyond the purely economic frame. Especially as a result of the Ukraine war, the realities of the shared geo-political interests of the EU and the UK are more obvious. So, too, can it be seen that, far from ‘getting Brexit done’ with an ‘oven-ready deal’, the Northern Ireland issue that proved so central in the Brexit process has not, in fact, been resolved. And since that is in large part because Brexiters have insisted that what was agreed and signed up to should not really be binding, then that undermines their equally loud insistence that every other aspect of the Brexit Boris Johnson agreed is, for all time, sacrosanct.
Moreover, before Britain left the EU, Brexiters could claim that they were seeking to ensure that ‘true Brexit’ was delivered. But, now, they are adamant that it has not been delivered. So often have they said that was we have got is ‘Brexit in name only’ (BRINO) that it takes away the force of their attempt to portray a softer Brexit than we currently have as BRINO. For if we really only have BRINO then why not have a different, less expensive BRINO? Or no Brexit at all? Or, to put it another way, if they insist that ‘Brexit has died’ because the ‘benefits’ (as they cast them) of a low-tax, low-regulation economy have been killed off, then the argument (in their terms) for undertaking Brexit has disappeared. So why not soften, or even reverse, it?
All of this means that the current, revived, Brexit debate is occurring against a different background to that of the pre-2020 debate. In one way, that background is worse for erstwhile remainers because, of course, there is no prospect of ‘remaining’, as sometimes seemed possible up until the result of the 2019 election. In another way, it is much worse for the Brexiters, because the very fact it is occurring is a sign of Brexit’s failure and, as the desperate tone of their attempts to ‘save’ Brexit shows, they know that it is a fragile and unpopular project. As if to provide a timely metaphor, last week Unboxed, the rebranded version of the Festival of Brexit, came to an end amid a welter of criticisms of it for being unpopular failure and a waste of public money.
That unpopularity in turn means that the biggest battering-ram argument they used to constantly invoke, that Brexit is “the will of the people”, is now little more than a crumbling cudgel. Which people? The ones who, not just in the odd survey, but over and over again in every opinion poll say in a clear majority that Brexit was a mistake? 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?
It all comes down to the Labour Party now
So in all these ways, something important is changing in the Brexit saga and that has become apparent last week. It is possible that the latest debate will all die down again, but that is unlikely because the underlying issues of the damage, especially the economic damage, of Brexit will persist. So, assuming economic performance continues to be the defining theme of Sunak’s government, then the debate will continue, and with it the daily new examples of Brexit’s failure and damage.
However, the unchanged dynamics of the Tory Party mean that Sunak will not be able to address, still less resolve, the problems of Brexit. There’s certainly little sign he can end the Northern Ireland Protocol row, because of those dynamics. It’s not even clear he will be able to stop adding to the damage, for example by dropping the EU Retained Law Bill, now widely recognized as being a recipe for administrative and business chaos but beloved by the Brexit Ultras in his party.
So if dealing with the damage of Brexit is to happen in any reasonable time-frame then it will fall to the Labour Party, assuming they win the next election. In any case, they can hardly stay mute as the Brexit debate revives. That makes it crucial, as pollster Peter Kellner argues, that Labour go into the next election with a clear policy to undo the worst of the economic damage of Brexit. It has to be clear, because otherwise they will not have a clear mandate if they win. And it needs to go well beyond the timidity, and vacuity, of ‘making Brexit work’ to some form of single market membership and a customs treaty.
In turn, that means breaking with its caution about immigration, the legacy not just of Brexit but of Gordon Brown’s ‘Mrs Duffy’ moment in 2010, and still in evidence last week in Keir Starmer’s comments about immigration at the CBI conference. In any case, the salience to the public of immigration as a political issue has steadily fallen from its peak in 2015, when 71% thought it was one of the top three most important issues facing the country, to as low as 14% in April 2020 and 22% at the beginning of October this year. It’s true that this has since risen to 37%, but that is almost certainly because the survey treats “immigration and asylum” as one issue which, for that matter, almost certainly makes all of the scores higher than they would be for ‘immigration’ alone. In short, Labour needs to be sure they are not fighting yesterday’s political battles on immigration.
As the staunchly Labour-supporting Associate Editor of the Mirror, Kevin Maguire, put it last week, Labour is “out of step with public opinion” on Brexit. I would put it more strongly than that. For once, Labour has a rare, perhaps generational, chance to stake out a position which is true to its values and those of its leader – for no one can seriously doubt, as they could of Corbyn, that Starmer thinks Brexit was a huge mistake – and which catches the tidal flow of the public mood, makes its economic policy credible, and is in the national interest. It’s a huge prize, if Labour can grab it.
Central to that happening is for this emergent new Brexit context to be fully understood and, in particular, for Labour to lose their apparent terror of being branded ‘enemies of the people’. That headline, with all the wider freight it carries, comes from 2016. Times have changed: Brexit has changed them. The people have changed: time and Brexit have changed them. The country and the world have changed: Brexit can change with them. But can Labour change? That remains to be seen but, right now, it is the only question that really matters.
— AUTHOR —
▫ Professor Chris Grey, Emeritus Professor of Organization Studies at Royal Holloway, University of London, and previously a professor at Cambridge University and Warwick University.