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Brexit: A Phony War?

Brexit A Phony War
Written by Graham Gudgin

It has been mostly all quiet on the Brexit front in recent months but is this a phony war? Will the remainer majority of the Labour Party come roaring back after an election victory. Brexiteers may well need to continue to fight the undeserved consensus that Brexit has damaged the UK economy.

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The last few months have been good for Brexiteers. The long resistance of the remainer Jacobites seems to have faded away. Brexit has been less in the news. Personal sourness to individual Brexiteers may not have gone away but it is easy to feel that Brexit is now a done deal. None of the main political parties seem to want this to be an issue. Even the Financial Times seems to have dropped its war of attrition. Its campaign to highlight any tiny company having difficulty in filling in import forms has finally run out of steam. Teething problems on UK schemes to record or check imports can still be highlighted as if they were major issues but it is not obvious that anyone is taking all that much notice. Journalists like William Keegan in the Observer may continue to denounce Brexit every week even eight years after the referendum but intelligent remainers have long since stopped reading out of boredom.

Are these views too complacent? Brexit is unpopular with the public and we can understand why the Tories wish to let sleeping dogs lie and mention Brexit as little as possible during the general election campaign. But what about Labour? Sir Keir Starmer needs to win back the lost ‘red wall’ Brexit-supporting seats, and saying nothing much about Brexit is an understandable election tactic. Labour are on track to win a large majority over a Tory Party which surrendered any public affection it once enjoyed. In the words of the Irish folksong, ‘whatever you say, say nothing, best to say nothing at all’.

The danger of course that this is a phony war and that once Labour have their victory, their anti-Brexit majority will come roaring back. Buoyed up by a belief that a public majority believe Brexit to have been a mistake, the zealots in the Party may want to push for all manner of policies which cosy-up to the EU. These could range from full rejoining to a more informal policy of full alignment with EU regulations.

Starmer himself was in charge of achieving a second referendum under Jeremy Corbyn, and dedicated remainers like Hilary Benn will be in the Cabinet. Benn was the architect of the infamous Benn Act of 2019 which gave Parliament the power to block the Government from leaving the EU without a trade deal, hence depriving the UK of a bottom line in its negotiations. Benn once told an audience at the Institute for Government that Brexit was impossible due to a world shortage of wooden pallets, so his future views on relations with the EU could be anything. Under Starmer he has been exiled to Belfast as future Secretary of State for Northern Ireland. His influence on Brexit may thus be dampened even if the scope for damage in Northern Ireland is great and rumours fly that  the rules on holding a border poll in Northern Ireland may be changed.

While the current Labour fatwa on mentioning Brexit could be withdrawn after the election it is also possible that the leadership will not want EU issues to get in the way of other priorities. There will be moves to strengthen defence arrangements with the EU but the realities of NATO will stop anything that could damage our key defence arrangements .  Regulatory alignment with the EU may well be strengthened, but this will do relatively little to change the reality of life under the Tories over the last few years.

Even if these are the political realities, the danger of a drift back towards the EU remains, and Brexiteers must remain vigilant, particularly on the economic impact. Remainers have enjoyed a considerable success with claims that leaving the EU has weakened the UK economy. These claims are no longer backed by ongoing evidence but instead are insinuated into a wide range of comments and articles as if they simple statements of the obvious. A typical article occurred this week in the Times when their prominent opinion writer Daniel Finkelstein suggested that both Parties should be talking more about Brexit in the election campaign. In passing he slipped in, without any evidence, the judgement which claimed that ‘Brexit makes Britain a less attractive place to do business’ (Times 22 May).

In a letter to the Times I asked how we might best test the accuracy of this claim. A good way, I suggested, is to examine the extent to which foreign firms actually invest in Britain. United Nations (UNCTAD) figures show the value of greenfield foreign direct investment (FDI) into the UK running a record levels. (Greenfield investment is actual investment in new projects as opposed to mergers and acquisitions). The latest figures, for 2022, shows the UK attracting 8.4% of global greenfield FDI despite having only 1% of world population. This level is well above the pre-referendum average, is second only to the USA, and nearly double the combined level of Germany and France. Indeed, it is above the combined level of India and China. Daniel Finkelstein may be forgiven for not knowing this good news, since as far as I know it has not been reported in any of the main economic media.

Needless to say, the letter has not been published and it is hard to suppress the feeling that the Times does not welcome criticism of its writers. Fact-checking may have become something of a modern media fashion but the obvious weakness comes in deciding which facts need checking.  If remainers revive their campaign at full blast then it will be imperative to attempt to get the economic facts into the public domain.

Even if the pressures do increase for moves back towards the EU, will the EU welcome overtures? The jury is out on this. One notable feature of the post-Brexit world inside the EU is the way in which the loss of the UK is never mentioned and has been written out of the record. Prolonged conferences on the Future of Europe make no effort to learn any lessons or even to note that in 2021 the EU lost a sixth of its economy. Similarly, the twentieth anniversary of the accession of ten new member states in 2004, promotes concerns about even more enlargement but makes no comment on the decisive eastward shift in the balance of the EU towards which Brexit heavily contributed.  The EU hierarchy is bewildered by the loss of the UK and it is hard to predict their attitude to future overtures from Labour.

It is thus far from obvious that a new Labour government will reopen the Brexit question in an important way, but as the American abolitionist, Wendell Phillips said long ago, ‘eternal vigilance is the price of liberty, power is ever stealing from the many to the few’.

Dr Graham Gudgin CBE is co-editor of BriefingsforBritain

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Graham Gudgin