Whatever the perceived benefits of the UK’s official withdrawal from the European Union on 31 January 2020, there can be no denying that Brexit remains a contentious, disruptive, and divisive issue, with the nation not only split between Brexiters and Remainers, but also now witnessing a surge in numbers of those who apparently regret casting their vote in favour of leaving during the 2016 Referendum. Not only that, but some Brexiters, particularly those who have consistently favoured a clean break or “Hard Brexit”, are now highly critical of the UK government’s efforts, or lack thereof, in implementing the project up till now in the manner desired.
A Brexiter narrative attributes failure to “deliver Brexit” on a combination of unforeseeable events (Covid pandemic, war in Ukraine), low interest rates fuelling inflation, and active sabotage by liberal pro-Brussels “elites”, including parliamentarians (both MPs and peers), civil servants, academics, central bankers, journalists, TV and radio presenters, bishops, and trade union leaders, among others According to Brexit enthusiasts, short-term failings and any resulting discontent must not be allowed to derail a long-term project aimed at boosting Britain’s rightful place on the world stage.
On the other hand, Remainers claim that a narrow majority for the leave vote in the 2016 referendum resulted from voter apathy, a failure to understand the implications of Brexit, and a campaign that over-emphasized the supposed benefits and underestimated the potential risks of leaving what was the world’s largest trading bloc at the time. Furthermore, there was no unified vision for taking Brexit forward, which meant a variety of different models gained support within the ranks of Brexiters.
Unpicking the direct effects of Brexit on the UK economy have proved difficult at times, partly because of the confounding effects of Covid, the conflict in Ukraine, global supply chain problems, high inflation, and the energy crisis. There are, however, some direct consequences of the severance of links between the UK and the EU. Frictionless trade has been impeded from non-tariff trade barriers caused by EU product standards and other regulations, leading to increased paperwork and transaction costs, which in turn have eaten into the profits and reduced the exports of small- and medium-sized businesses to EU member states. A trade border within the territorial borders of the UK has brought in customs checks on goods, agricultural produce, and livestock moving between Great Britain and Northern Ireland, and led to suspension of Stormont, halting parliamentary activity in Northern Ireland. Depletion of the workforce in the UK’ s transport, construction, hospitality, retail, agricultural, and health and social care sectors from restrictions on free movements of people from the EU, has led to a deterioration in services. The rights and privileges of British expatriates in EU member states have been restricted. Collaboration between the EU and UK in matters of law enforcement, medical and scientific research, and educational and cultural exchanges have also been hampered.
Many of the stated benefits of Brexit are aspirational, in keeping with the idea of a long-term project. A so-called “bonfire” of around four thousand pieces of inherited EU legislation, involving the revision or revocation of many EU laws, while retaining others, is part of the Brexit Freedoms Bill, which may, however, have a detrimental effect on laws aimed at protecting consumers, the environment, or workers’ rights. A new points-based immigration scheme has not reduced net immigration, as a skills shortage sucks in suitably qualified workers from outside the EU, while lack of effective cross-border working ensures a steady stream of small boats carrying would-be asylum seekers across the English Channel. New free trade agreements, with Japan, Australia, New Zealand, and some other nations, do not compensate for the failure to arrive at similar arrangements with such major economic players as India and the US, although signing up for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) holds promise for the future. British manufacturing has suffered where reliant on supply chains involving Europe. The touted benefits of free ports are by no means certain, and it is possible that they may, at best, only serve to divert economic activity from elsewhere. . Radical, no-holds-barred, deregulation of financial services may not necessarily attract business investment, particularly as it is viewed by some as a race to the bottom of standards, reducing oversight of banks and potentially compromising protection for investors . Some reports indeed suggest the City of London may be losing its competitive edge over other major financial centres as EU firms and banks chose to concentrate their activities within Europe, although not to the extent initially predicted. Freedom from the common agricultural and fisheries policies has yet to translate into benefits to farmers and fishermen and in many cases only added to othier financial distress.
It can, at times, be hard to make any sense out of the conflicting reports on the advantages and disadvantages of Brexit, or to rely on the gloomy predictions of economic prophets with an unproven track record. A major problem with the current economic and political analyses of the impacts of Brexit is that they are frequently ideologically driven and pander to the instincts of those in the opposing camps, strengthening each other’s rigidly-held opinions by a process of confirmation bias. Brexit is by no means a Pyrrhic victory, but at times it may appear to observers of the political and economic scene to be a serious case of deliberate self-harm. But whether one likes it or not, Brexit is a reality that cannot be readily and easily undone. It is up to the government and its institutions to engage in both damage limitation exercises and to target potential opportunities, so that the nation is not further disadvantaged by any negative consequences of the narrowly-decided EU referendum vote. It is unfortunate that EU-UK relations have not been uniformly harmonious, but that does not preclude negotiated resolution of such taxing issues as the Northern Ireland Protocol. There is not much time left for the government to act decisively. Who can confidently predict the electoral outcome in 2024, based on the current state of play?
Ashis Banerjee