Scribblings

Brexit Wars: A New Beginning?

The world is a very dangerous place, made more dangerous by the day by the aggressive actions of dictators and would-be dictators. In such a world, if you are a small or medium-sized country, there is potential safety in numbers. All the more so if the “numbers” come together in a permanent, organised, structured way. Such as the European Union. Not perfect, far from it, and a long way from what it needs to be. But it is a foundation on which we European can build.

Remember, the EU only came into existence in 1958. In the wider sweep of history, what it has managed to achieve in the past sixty years should not be underestimated. Europe is a continent that, over the centuries, has had “forever wars”, some of which lasted more than 100 years. And we killed millions of our fellow Europeans over religious differences. Those who want to bring religion back into politics should remember this.

One country stands apart from the rest of the continent. No, not Switzerland, which is as closely integrated with the EU as you can get without being a member. Switzerland allows for the free movement of people and is in the Schengen regime.

Of course, it is Brexit Britain, a country that decided ten years ago to leave the European Union and go its own way.

Go back and read some of the things that were said by Brexiters at the time. The UK’s leaving would be the trigger that would lead to the collapse of the Union as other countries followed it out. They wanted this to happen, for the EU to fall apart. The UK would then take the lead in building a new arrangement of free trading countries, shorn of all the stuff the UK never liked about the EU, such as its suite of labour and employment laws, not to mention the single currency. The UK would soon be cutting trade deals across the world, not least a mega deal with the US. Sunlit uplands beckoned.

There were no sunlit uplands. Just grey and dismal lowlands, forever enveloped in a fog of lies and uncertainty. Now perhaps, Brexit Britain was unlucky in its choice of leaders, after the man who had called the referendum, David Cameron, cut and run. Theresa May, Boris Johnson, Liz Truss, and then Rishi Sunak. Hardly a parade of political titans, blessed with the political skills needed to guide the UK through turbulent times.

After the chaos of the Tories’ time at the helm, Labour was returned to office in 2024 with an artificial landslide. I say artificial, because you cannot in your heart believe that 34% of the vote is a landslide, even if it gave Labour an overwhelming majority in the House of Commons. But Labour immediately proceeded to squander the power of its majority with a series of ill-judged decisions.

I am Irish and not British, so I have generally tried to avoid commenting on UK government policies, with two exceptions. First, as my day job is working with large US multinationals on labour and employment issues, I take a keen interest in what is happening in this legislative area. For example, the Employment Rights Act is just now of particular interest, especially those provisions which touch on collective bargaining and trade union recognition. I take the same interest in similar laws in EU countries.

As anyone who reads these Scribblings and my previous Brexit Blogs knows, over the past ten years I have written frequently about the relationship between the UK and the European Union.

The world today is a very different place from the world in which the UK narrowly voted for Brexit. The Russian attack on Ukraine has brought the scourge of war back to the European mainland. China has become a major economic and technological power, already dominating many of the industries of the future such as solar, wind power, and EVs. At the same time, its intentions towards Taiwan are uncertain.

The utter unpredictability of the US president, Donald Trump, makes for a nervous world. When it comes to Trump, I am reminded of the conversation between Alice and the White Queen in Through the Looking Glass:

Alice: “There’s no use trying,” she said: “one can’t believe impossible things.”

The Queen: “I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half-an-hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”

Which is what Trump does and then changes his mind before dinner in the evening. Call it Trump Through the Looking Glass: 10 Impossible Things in One Day.

It is no secret that the overwhelming majority of Labour Party members want the UK to again join the EU. However, before the 2024 general election, the leadership committed to three red lines in an attempt to appeal to Brexity working-class voters: no to the customs union; not to the single market; and no to free movement. The leadership will not move off these red lines, even as the economic evidence stacks up about the damage that Brexit has done to the UK economy, estimated by a team of US researchers to amount to as much as 8% of GDP. See also these comments from the former chief economist at Goldman Sachs: here.

The leadership position defies logic. If you were aware of something that was wrecking your economy by as much as 8% in lost GDP, would you not move to put an end to it and reap the financial rewards in extra taxes flowing into the public coffers? As John Maynard Keynes is reputed to have said: “When the facts change, I change my mind—what do you do, sir?” Stick with the red lines, it seems.

UK Prime Minister, Keir Starmer, seems to think that the UK will be able to gain access on a sector-by-sector basis to the EU Single Market.

“It is increasingly clear, as the world continues down this volatile path, our long-term national interest requires closer partnership with our allies in Europe and with the EU,” he said. (here) and (here)

But, as the Financial Times (here) notes:

As Reeves and Starmer have both made clear, improving ties with the EU is also an increasingly important pillar of the government’s growth plan. But the party’s strategy to seemingly cherry-pick arrangements with the bloc will make substantive progress on negotiations difficult.

Since the days of the Coal and Steel Community in the early 1950s, through the years of the Common Market, and then the European Union, the UK has always wanted to be in and out at the same time. In for the things it liked and out for the rest. It finally got to the point when it could not stomach staying in, even for the things it liked and left.

From the perspective of the members of the EU, once bitten, twice shy. Does a leopard ever really change its spots?, they will ask. Rightly so.

Sometimes, you get the impression that the UK government thinks it can negotiate a deal with the EU Commission to “slip in the back, Jack”, to borrow from Paul Simon. But when it comes to the really big decisions, it is the member states that decide, not the Commission.

Why would member states agree to give the UK, which walked out of the EU in a huff, access to the Single Market on a sector-by-sector basis on the cheap? Or any other basis for that matter. You only have to ask the question to know that they won’t. They are not going to give the UK a competitive advantage over their own businesses. Especially when the UK wants to keep sectors where it thinks it is ahead out of the Single Market. The phrase “cherry picking” may be a little hackneyed by now, but it remains true, nonetheless.

Further, with all else it has on its plate, is the EU going to spend time and resources negotiating with the UK when people in Brussels can read UK newspapers and UK polls and know that Starmer is politically tanking?

I wouldn’t. Would you?

Three final points. First, despite all of the above, the change in tone from UK leaders towards the EU is welcome if, for the moment, that is all it is, a change in tone.

Second, if you are going to open a negotiation with another party, then you need to know exactly what it is you want and be prepared to spell that out when the discussions start. And it is not helpful if, from the get-go, you lay down red lines which you will not cross, but then you expect the other party to cross their red lines to give you the deal you want.

Finally, the UK’s approach to the EU, as set out by Starmer in last Wednesday’s speech, is the same as it always was; membership is just an economic and financial transaction to be decided by the balance of pounds and pence, preferably in the UK’s favour. No hint of any buy-in to the ideals of the wider European project.

But then, as Napoleon is reputed to have said, the UK is little more than a nation of shopkeepers, open all hours.