Brexit in its basic definition of the UK having left the European Union is done. Yet, the UK economy is only being to paying the price for Boris Johnson’s hubris during the negotiations with the EU, writes John Ryan (CESifo).
On 24 December 2020, Christmas’ Eve, the European Union (EU) and the United Kingdom (UK) reached a deal on the framework of their future relations – the so-called EU-UK Trade and Cooperation Agreement. British Prime Minister Boris Johnson once said that negotiations with the EU on the terms of Britain’s departure from the bloc would let Britain have its cake and eat it too. The UK, he insisted, would walk away with a trade deal that preserved unfettered access to the continent’s market of 450 million consumers, while freeing the UK from European rules, regulations, and standards.
Johnson has a unique view of sovereignty which does not equate with the reality of 21st-century trade. He has deceived himself or is a slow learner in accepting the flaws in his understanding which led to English populist nationalism. Even at this point, Johnson still has plenty of admirers and apologists in the media and elsewhere.
The British exceptionalism that Boris Johnson believes in is a post-Brexit Britain which is a world-beating power. The COVID-19 pandemic has starkly revealed the weakness of Johnson’s government, which seems incapable of running a modern society or fulfilling its most basic responsibility in keeping its citizens safe from harm. The comparative success in vaccine rollout is a welcome exception but should not erase from public scrutiny the many failings of the current government in the COVID-19 crisis.
There are striking parallels between the way this government has handled COVID-19 and its approach to the Brexit negotiations. In both cases, reality has taken second place to public relations, with the recurrent consequence that unwelcome decisions have been taken too late. The communication of these eventual decisions has seen contradictory and undermining rhetoric from ministers and their press minions.
The resultant unpreparedness will be an entirely fitting symbol of Brexit as a whole. Brexit has been and is, an ill-conceived enterprise, based almost entirely on slogans and delusion. This is further reflected in the lack of preparations by Boris Johnson’s government for the wholly predictable disruption to British trade after 1 January 2021.
The question of the UK re-joining the EU will not be on the political agenda for at least a generation. In fact, by now even many Remainers want to make the best of a bad job and move on. The EU would not want an application from a country that lacked a national consensus in favour of re-joining – which is far away. Meanwhile, Brexit adds to uncertainty about UK unity. It is helping to boost support for the Scottish National Party (SNP) and for Scottish independence. And then there is the situation in Northern Ireland which is staying in the EU single market and the customers union. Nobody can be sure how the border in the Irish Sea will affect politics in Northern Ireland in the next few years economically and politically.
Therefore, it remains to be seen what the long-term EU-UK relations will ultimately look like. While the EU-UK Trade and Cooperation Agreement is yet another step in the Brexit process, it is by no means the end of it. The implementation of the agreement – and the transitory periods it has created in some fields – will require continuous adjustments between the parties in the future, potentially opening also new scenarios as Europe increasingly acquires a concentric circles shape.
Every negative consequence of Brexit for the UK and the clear advantage for the EU is alerting the British public to the realities of Boris Johnson’s deal. As investment slows and jobs go elsewhere there will only be one person to blame – Boris Johnson. Brexit in its basic definition of the UK having left the European Union is done. The deal is thin, and the UK’s path is perilous. This exercise in national self-destruction has ended as a sad sideshow to the COVID-19 crisis, while Britain’s annual economic decline has been the worst in the G7 at 9.9 per cent. In comparison, GDP fell by 3.5 per cent in the US, by 5 per cent in Germany, 8.3 per cent in France and 8.9 per cent in Italy. However, the UK fared better than Spain, where the economy collapsed by 11 per cent last year.
Damage from both COVID-19 and Brexit will ultimately be the epitaph to Boris Johnson, Britain’s worst, and most incompetent Prime Minister. His track record of incompetence so far includes 129,498 deaths as of 21 February 2021; £2 trillion in debt and £1.5bn channelled to friends of the Conservative party through PPE contracts.
As the Irish columnist Fintan O’Toole has written recently: “The EU scapegoat has now been ritually sacrificed to the gods of national identity in the hope that they will, in turn, bestow the greatness that holds Britain together. When the gods do not respond to the sacrifice, the people often turn their wrath on the high priests”. The sight of the UK being comprehensively out-negotiated by the EU while its political and media elite convinces itself that it scored some great triumphs and while misleading the UK electorate about the reality of Brexit is truly pitiful.
The widespread incompetence and cronyism that surrounds Boris Johnson make it hard to predict where UK politics may go in 2021. It is still four years to the next general election but amidst the disastrous impact of Johnson’s incompetence and constitutional strains, UK politics could rapidly become more unstable. The UK’s politics have been splintered, undermined, and upended by Brexit, and that looks likely to continue into the coming year and beyond.
The UK exceptionalism mentality keeps speaking of sovereign equals which is nonsense given the EU is a bigger population and a regulatory and trade superpower. Inevitably, the UK has succumbed to the reality in the trade deal on EU terms. Former Prime Minister Theresa May’s triggering of the Article 50 process before understanding what the country wanted from the trade negotiations was an error. The lack of a developed strategy by May was ill-advised, incompetent and arrogant and Johnson if anything has further compounded those errors. The UK economy, trade and business are paying a heavy price for Boris Johnson’s hubris.
This article gives the views of the author, and not the position of LSE Brexit, nor of the London School of Economics.
Let me assume in this contribution that Professor Ryan is right about everything else, that Brexit will turn out to be a disaster, and that Boris Johnson’s hubris will lead him to disaster (as hubris does) which means he loses the next election big, presumably to Keir Starmer, possibly in a coalition with LibDems or SNP.
Professor Ryan goes on to say (A) “The question of the UK re-joining the EU will not be on the political agenda for at least a generation. In fact, by now even many Remainers want to make the best of a bad job and move on.” and (B) “The EU would not want an application from a country that lacked a national consensus in favour of re-joining – which is far away.”.
(A) I find simply incredible. I don’t think that UK Remainers have given up. Professor Ryan says “Every negative consequence of Brexit for the UK and the clear advantage for the EU is alerting the British public to the realities of Boris Johnson’s deal.” And of course, on Professor Ryan’s assumptions, to the realities of Brexit. Is it credible that former Remainers in the Labour Party are going to let Keir Starmer into Number Ten without a commitment to rejoin (at least, after a referendum). I don’t think so. Not if Brexit is seen to be hurting the UK that much.
(B) is more interesting. The negative consequences of Brexit for the UK are of course felt in mirror-image (though not so starkly) by the EU. So the economic arguments for the EU would be in favour of allowing the UK’s reaccession. What would speak against? The fear that the UK might leave again? But surely the humiliation of the Brexit years would deter the UK, or anyone else, from attempting an exit. Indeed, it seems to me the presence of a newly committed UK within the EU might be the best advertisement the EU could find to prevent others from attempting to lead, or trying to find other ways of “having their cake and eating it”. Nothing is certain, but I don’t see any definite reason why the EU should block UK reaccesson. There will always be, in the UK, a group of Brexit true believers, but I don’t think the EU would need to be afraid of them.
Totally agree with you. I would even go so far as to say that potentially by the next election there will be a significant majority to at least negotiate a closer relationship with the EU. Once people understand that a closer relationship will allow them to do all the things that Brexit has robbed them of, it will be a one way street.
Even if you were right about the ‘Brexit Disaster’, you haven’t considered the possibility of an ‘EU disaster’. So far, the EU have shown themselves to be very wrong footed on the vaccine front. They didn’t understand the need to order early. They stumbled into an unnecessary error over Northern Ireland. Then, certain EU members undertook a political campaign to rubbish the AstraZeneca vaccine. Consequently, under 50-year-olds are now receiving the vaccine in preference to older citizens who have greater need. Furthermore, we are now being told that AstraZeneca vaccines are going to waste because nobody wants them. EU politicking is costing lives. In the meantime, Ursula von der Leyden makes the undignified boast that “In Italy, with a population similar to that of Great Britain, twice as many citizens received full vaccination protection with the second dose as in the UK.” Such childishness doesn’t bode well for the next crisis.
We know what the next crisis will be. It will be the post-covid economic recovery. We can expect to see Euro crisis mark 2 but with knobs on. This time it won’t just be Greece. Spain had 14% unemployment before covid. Italy now has borrowings which are 180% of GDP. How will the EU tackle this crisis? We can get a clue from their vaccine policy. Countries are being allocated vaccines in proportion to population size not death numbers. If you live in a high-covid rate country then your life can be sacrificed on the altar of pseudo-equality.
TJ: “Even if you were right about the ‘Brexit Disaster’” Are you addressing me? I wasn’t expressing an opinion on whether or not there will be a Brexit Disaster or not but assuming, for the sake of argument, what Professor Ryan believes, before going on to disagree with him. Surely you are aware of the debating tactic of adopting your opponent’s assumptions in one area to show how they are inconsistent with the rest of his arguments.
I don’t really want to get once more into the general debate about whether Brexit was a disaster or not. For one thing I honestly don’t know. For another, it is too late to do anything about the immediate consequences. For a third, we should know a lot more by the next General Election, when as I suggested, the issue may (or may not) have political salience again.
I hope though that you are wrong about the post-covid economic crisis, since I live in Germany and don’t want any Euro crisis mark 2 with knobs on. My job is pretty crisis-proof, but not everyone around me would be so lucky. As always in politics, we will see.
Alias: I am sorry that I attributed the ‘Brexit disaster’ suggestion to you rather than Prof Ryan, it is a risk you take when you play ‘devil’s advocate’. I was, though, making the valid point that any possibility of re-joining the EU depends not just on conditions in the UK but also on conditions in the EU. Indeed, as I understand it, Kier Starmer has already abandoned any prospect of running at the next election on closer ties to Europe as a direct consequence of the NI/vaccine cock up by the EU.
It was regrettable that that the EU misjudged the vaccine purchase issue, but it is unforgivable what has happened subsequently. The Guardian yesterday reported that in Germany, only 187,000 of the 1.5 million available AstraZeneca shots had been used by the end of last week and today they reveal that four in five Oxford Covid jabs delivered to the EU are not yet used. Indeed, Belgium has administered only 4% of its allocated AstraZeneca vaccines. The EU seems determined to live up to the Leave campaign’s worst characterisation and exceed it. If there is to be a post-covid economic crisis then it doesn’t inspire confidence in the EU capability to address it.
The UK is in a relatively good position for post-covid economic recovery. It has been reported that over 1.3 million overseas nationals have left the UK as a consequence of the pandemic, so the country seems to have inadvertently exported a sizeable portion of its potential unemployment problem. Furthermore, the Government is in the enviable position where it can embark on job creation and directly address unemployment in the UK without attracting a potential influx of EU citizens under Free Movement.
The EU seems to politicking on financial equivalence. If they have accorded financial equivalence to Brazil, then International law requires them to do the same for the UK unless they have cause not to. Currently, the Commission claims that it is withholding equivalence because the UK could change its regulations in the future. But in reality, either side can, in any case, withdraw equivalence in 30 days if there is good cause. If the EU is heading for a second Euro crisis but choses to cut themselves off from the financial expertise of the City of London, then it will have to accept the consequence. It doesn’t look like they have learnt anything from the vaccine farce.
From the Guardian…
“Asked whether she would volunteer to be administered with the vaccine, Merkel said: “I am 66 years old and I do not belong to the recommended group for AstraZeneca.” “
TJ: “Merkel said: “I am 66 years old and I do not belong to the recommended group for AstraZeneca.” She was apparently following the recommendations of the Ständige Impfkommission of the Robert Koch Institute https://www.zdf.de/nachrichten/panorama/corona-stiko-astrazeneca-impfstoff-100.html . I don’t suppose the Impfkommission is infallible, but perhaps they know more about these things than either me or you or Angela Merkel, so it is not unreasonable for her to trust them on this point.
TJ: “Indeed, as I understand it, Kier Starmer has already abandoned any prospect of running at the next election on closer ties to Europe as a direct consequence of the NI/vaccine cock up by the EU.” Perhaps you can find something more definite, but I cannot find anything where Keir Starmer has actually said “A Labour Government would not rejoin the EU in the next parliament”. I found https://www.theguardian.com/politics/2020/dec/29/labour-will-not-seek-major-changes-to-uks-relationship-with-eu-keir-starmer but the closest it comes is “he could not envisage Europe or Brexit playing any part in the election campaign of 2024”. But “could not envisage” is pretty weak. If Brexit were really clearly a disaster in 2024 (note the “if”) he would be a fool not to make use of it.
Keir Starmer is I think being pretty clever. He knows perfectly well that the next General Election will be won in the next four years and not the next six months. He knows that if he bangs on about Brexit now he will just alienate millions of typical Labour voters who voted for it. Better to pick holes in other parts of government policy and present himself as the caring, but boringly competent, alternative to Johnson. If Johnson is trying to channel Churchill, Starmer probably would like to play the role of Attlee.
“Whether we like it or not, that is going to be the treaty that an incoming Labour government inherits and has to make work. And it is not being straight with the British public to say we can come into office in 2024 and operate some other treaty,” he said.”
https://www.theguardian.com/politics/2021/jan/10/keir-starmer-accepts-end-of-eu-free-movement-in-brexit-reversal
“I don’t suppose the Impfkommission is infallible, but perhaps they know more about these things than either me or you or Angela Merkel”.
… and the World Health Organisation also? I think the phrase “German exceptionalism” comes to mind.
That isn’t the point in any case. EU officials have warned that one of the biggest challenges ahead will be fighting the spread of vaccine misinformation and addressing vaccine hesitancy. It is for Macron and Merkel to address this but they don’t seem up to the job. It is shocking to see how quickly the EU is going adrift without the steadying hand of the UK. Merkel’s remark seemed ill advised in the circumstances, she could have chosen to say nothing. She should never have supported von der Leyden for President. She was well aware of vdL’s past failures as defence minister particularly in procurement. But now Merkel can’t admit that she was wrong and she is doubling down.
Meanwhile, the European Commission has refused to comment on whether Germany has breached EU agreements by securing additional vaccine doses for its own citizens under a separate bilateral agreement.
Elsewhere, the EU continues to accuse the UK of wanting to be an offshore ‘Singapore’ despite UK denials and the evidence to the contrary. The EU is so determined to maintain this narrative that it is resolutely cutting off all other options from the UK. Are they unfamiliar with the concept of a ‘self-fulfilling prophecy’?
“I hope though that you are wrong about the post-covid economic crisis”
An opinion piece in the today’s Telegraph reads “The Fed has lost control of bond markets – and Europe is the victim. …. Markets are likely to keep searching for the pain threshold unless European Central Bank takes action soon, analysts warn.” Something is afoot though much earlier than I might have expected. Maybe it is just a premonition of things to come.
You state:
1.3 million overseas nationals have left the UK as a consequence of the pandemic, so the country seems to have inadvertently exported a sizeable portion of its potential unemployment problem.
The problem with migrants; (be they economic or other) is their motivation is off the scale compared to someone who sees low paid work as only marginally attractive.
Those 1.3 million motivated workers were probably twice as productive.
You seem unaware of what a total disaster this governments immigration policy is and how it has created economic barriers to the movement of labour; required to sustain or re-ignite it.
There is no way to dress this up other woeful incompetence on the part of the British government.
a significant majority to at least negotiate a closer relationship with the EU.
Johnson/Davis/Gove/Mogg and Farage have worked their charm offensive on the countries of the EU.
The EU members correctly see the UK as a basketcase of nasty xenaphobes who think they are superior to others..
This hubristic exceptionalism has convinced the EU that they are better off rid of us.
Wishing ill on others. How in keeping with the spirit of Brexit.
A. There is still a large and vociferous percentage of ‘Leave’ voters in the UK who have not changed their minds. Even though they are in a majority now, they will not give up their achievement without a lot of very strenuous argument and campaigning. Starmer is certainly not up for this fight and would have to be replaced – by who?
B. The UK were always an obstacle to much of the EU goals set by Germany and France. Now that they have a better opportunity to achieve these goals by UK abdication of influence, they will not be keen to see the obstructionist power back inside, obstructing them again – not for quite a while anyway
Jams:
A. (Reaccession within the UK) “There is still a large and vociferous percentage of ‘Leave’ voters in the UK who have not changed their minds”. They can reasonably argue that it is early days yet. If however in 4 years the Brexit chickens are well and truly seen to have come home to roost, and not be going away, I think a lot of minds will get changed. Of course there will always remain some Brexit true believers, but their number would diminish. Keir Starmer would I think do whatever makes him most likely to be PM and if the bandwagon is heading towards EU reaccession, I’m sure will jump on it.
B. (Attitudes of the EU27) I think Germany at least would follow the money, which would mean removing trade barriers with the UK. France would probably come around in time. I don’t think either the French or Germans see themselves as particularly keen to send powers to Brussels and formerly blocked by the UK. (There is not much enthusiasm for sending powers to Brussels right now.) But I think a more detailed discussion of this point is here: https://blogs.lse.ac.uk/brexit/2020/01/23/membership-2-0-what-the-uk-rejoining-the-eu-would-involve/
In the event that the UK finds it cold outside the EU, I see a lot of parallels with the 1960s and 1970s, where scepticism on both sides was (gradually) replaced by acceptance.
of parallels with the 1960s and 1970s, where scepticism on both sides was (gradually) replaced by acceptance.
Reply
Two decades of woeful economic performance.That’s your silver lining?
Delusional is the word that readily comes to mind.
“In the event that the UK finds it cold outside the EU, I see a lot of parallels with the 1960s and 1970s, where scepticism on both sides was (gradually) replaced by acceptance.”
What are you talking about? Britain first began talks to join the EEC in July 1961. The UK’s applications to join in 1963 and 1967 were vetoed by the President of France, Charles de Gaulle. They joined in 1973.
““For him, keeping Europe independent from the US was paramount, and he never forgot the strong links between London and Washington – which he saw as acting against France’s interests during the Second World War.”
https://www.france24.com/en/20191013-did-charles-de-gaulle-foresee-brexit
I agree with much of what John writes in his article, although I acknowledge the following may give the contrary impression. I think it is fairly clear to most people that Boris Johnson and his team have made a number of very poor decisions, but there are some points above which are, at least to some extent, unfair and that makes me question how balanced his analysis is, particularly with reference to the following extracts:
“Britain’s annual economic decline has been the worst in the G7 at 9.9 per cent”
“His track record of incompetence so far includes 129,498 deaths as of 21 February 2021; £2 trillion in debt…”
Regarding Britain’s economic performance being the worst in the G7, I would argue there is nothing to say that this figure is evidence of Boris Johnson’s failure. Firstly, the figure may be worse, but it is comparable to countries such as France and Italy which are the two closest EU Countries to the UK in economic size. Secondly, there is data regarding consumption and spending habits which show that spending within the UK is more weighted towards experience and service based expenditure than most countries in the world, more so than France, Italy and considerably more so than Germany – lockdown was always going to disproportionally affect UK GDP more than these countries irrespective of government action because the UK spends much more on the things that require closure to curtail the virus.
Regarding deaths, again the UK has the worst death toll in Europe but to not give any context or comparison and state it shows Boris Johnson’s “track record of incompetence” is at least somewhat unfair. The UK has the 3rd biggest population when compared to the EU27 therefore all things being equal, we should have the 3rd highest death toll, in fact it is 1st which does indicate we have done worse than 2 other countries at least, but we currently have the 4th highest deaths per million in Europe, which shows we have not done as badly, thus far, as some others. Another key factor which caused our death toll to overtake Italy’s was the spread of the variant discovered in Kent, considerably more transmissible and affecting the UK first before it was well understood. EU nations have had some weeks to tweak their rules prior to the UK variant becoming well established across the continent, nonetheless, the cases per million are now higher in many EU nations than the UK as a consequence of this variant.
The point regarding the debt is also quite unfair, most of the debt was there prior to Boris Johnson taking office therefore to claim it is his incompetence for tipping it over the symbolic £2trillion mark is unjustified. The increase in debt during the pandemic is by no means out-of-step or grossly excessive compared to other comparable nations.
Boris is never going to win any praise for being a great leader, nor should he, but is he considerably worse than all of his European counterparts? I don’t think so.
“The UK economy, trade and business are paying a heavy price for Boris Johnson’s hubris.”
The irony that this should be published on the day when the pound hits a 3 year high.
The exchange rates have more to do with China than the UK.
“the EU is going adrift without the steadying hand of the UK” Bien sur, absolument. Jawohl, das ist richtig! Essato!
H’m.
TJ: “What are you talking about?” The link you give is interesting. I don’t exclude the possibility that, as in the 1960s, a UK reaccession to the EU could be blocked by a de Gaulle Mk 2 somewhere. But de Gaulle’s veto was eventually overcome. I think if the UK were to want to rejoin, that would probably happen again.
One reason in the link you cited, the French wanting hegemony in the EU, would be moot now anyway, since no nation has that kind of leading role now, there are just too many of them.