In two weeks, Britain leaves the EU. Those vast marches, the crowded public meetings, the indefatigable Remain campaigners, the great speeches, the parliamentary wheeler-dealing and principled resignations were all for nothing. The "get Brexit done" Tories, exploiting the least electable Labour leader ever, won the election and were handed an 80-seat majority. The die is cast.
For the political class, the issue has become toxic. Boris Johnson wants Brexit expunged from the lexicon so the new normal is for Britain to be wholly outside the EU. Labour, flattened by its epic defeat, is agreed that to be pro-EU is political death. Remain Britain — half the population — has no champion.
It is a first-order political miscalculation. The Conservative party created Brexit. It must own it. Labour, after 2015, made two monumental miscalls: first, not sufficiently opposing austerity and later voting for article 50. There must be no repeat now. Brexit must be opposed in every dimension. This is a Tory project. The Tories must be its sole sponsor and live with the consequences. I think it will break them.
Johnson’s first acquaintance with the new reality was in the balmy air of Mustique, where he learned Donald Trump had assassinated Iran’s General Qassem Soleimani. British service personnel and nationals in the Middle East were suddenly exposed to the risk of deadly reprisals, alongside the risk to British economic and commercial assets. As were those of the French and Germans.
There was only one option: organise phone calls with Emmanuel Macron and Angela Merkel and issue a joint European statement resisting an endorsement of the attack and calling urgently for collective restraint. Dominic Raab, granted a fleeting audience with US Secretary of State Mike Pompeo was, when he babbled US propaganda, overruled by Johnson.
It was the first of many humiliations ahead. Britain is too exposed, too economically and militarily weak and too European in its interests to have a foreign policy consistently independent of the EU.
Economically, financially, commercially and culturally, it will be the same. It’s unlikely there will be one single event that crystallises the crisis in our shattered relationship with the continent. Rather, there will be a slow drip, drip of bad news and disillusioning personal experiences. By the end of 2020, Brexit will have cost Britain about £130billion ($NZ256billion) of lost output, Bloomberg Economics reckons.
But from 2021, Conservative refusal to accept the economic reality that Britain can only protect its dense European supply networks by agreeing to continue to implement EU regulations in every sector will mean frozen new investment and escalating closures. Especially in its crucial auto, aerospace, drugs, chemical, food and drink industries. Expect the Japanese carmakers to pull out first, as will Airbus — more will follow.
The much touted trade deals with the US, China and India — even if achievable on remotely equitable terms — cannot compensate for lost European markets, especially as the Americans, Chinese and Indians have zero intention of opening up their service sectors to British exporters where we do have some strengths. In this context, growth can only remain depressed and our current account deficit fantastically high. The risk of a run on sterling is ever present, dependent, as Mark Carney, the outgoing governor of the Bank of England, memorably said, on the kindness of strangers, whom the government so actively disdains.
Given all that, Johnson and Sajid Javid’s attempt to launch a "decade of renewal", in particular by trying to revive failing towns in the Midlands and the north, is once again incontinent babbling. Meanwhile, the dynamic liberal populations of our growing innovative cities will look back on EU membership, with its commitment to openness and bringing a continent together, with fondness and mounting regret. In Northern Ireland and Scotland, there will be determined attempts to do something about it — campaigning bitterly to split from Tory England. The EU, extraordinarily, is about to become very popular.
England, too, will move in that direction, but more jerkily. There can be no renewal without reconfiguring our capitalism so that it has a more European stakeholder character, accompanied by active state and city government. Johnson is condemned not to use Brexit to complete the Thatcher revolution as his Tory right want, but paradoxically to Europeanise the British economy to try to bring prosperity to the party’s new electoral base beyond the south. He will find that if he is to halt the exodus of inward investment — a crucial prop to the towns he wants to help — he is going to have to find some face-saving way of aligning with EU regulations.
Here the EU, if it shows some deftness, can construct a series of custom-made British arrangements. There will have to be standing bilateral councils on defence, cybersecurity, terrorism and climate change where the need is unanswerable on both sides. Similarly, if the UK wants to retain a semblance of its manufacturing industry, alongside trying to grow service industries as disparate as advertising and insurance broking, it will have to follow shared European single-market rules to allow market access. It will be a variable geometry Europe — with the UK as an uneasy outlier.
It will also be unstable and unsatisfactory and calls to drop the half-out/half-in relationship will emerge, followed by calls to rejoin fully, not least to keep Britain together. Britain, chastened by its exile and more European in its economic and social model, will find EU membership the second time round much easier. All this is inevitable: the only question is whether it will take five or 15 years, depending on how quickly the Labour party — or a successor — can capture and successfully exploit the new political currents.
- Will Hutton is an Observer columnist.
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The UK Labour Government ratified the Treaty of Lisbon in 2008 with no democtratic mandate and ignored its own manifesto commitment to hold a referendum. This really started the road to Brexit. The Treaty introduced Qualified Majority Voting which would never have been acceptable to the UK electorate if it had been given a choice.
The New Zealand electorate needs to keep a close eye on the NZ EU FTA for any level playing field provisions that effectively give the EU control over NZ's economy. David Parker said last month he was interested in the idea that "trade policy should avoid putting future governments in a position where they need to choose between implementing their election policies and remaining in existing international agreements". Is he saying that trade agreements should trump democracy? If not, why does so much of the NZ EU FTA that he is working on feature policy areas that have nothing to do with free trade.