Dear Subscribers,
This week on BfB, Paul Ormerod challenges the government’s narrative that Brexit is the cause of low economic growth. We also consider PM Andy Burnham’s proposal to re-open the Brexit debate and the possibility of rejoining the EU.
New on BfB: If Brexit is to blame for Britain’s economic woes what’s the EU’s excuse? By Paul Ormerod
If Brexit is to blame for Britain’s economic woes what’s the EU’s excuse?
The Labour government is blaming Brexit for low growth. Not only is that view unsupported by the empirical evidence; it also ignores the fact that EU countries suffer from the same problem, and that Britain’s productivity has been weak since the late 2000s – long before Brexit. If the government and Rejoiners insist on claiming that rejoining the EU would somehow solve the UK’s growth problem, they need to explain why low productivity plagues the EU too.
Burnham: Rejoining the EU
This week at the Labour Party Conference Prime Minister Andy Burnham made several future policy commitments, including scrapping the triple lock on pensions and creating a ‘National Care Service’. He also opened up the possibility of the UK rejoining the EU. In an interview with the BBC, Burnham set out the options he is considering: ‘stay as we are…[or] we could look at what George Osborne has said about the Customs Union, [or] we could look at what the Liberal Democrats said at their conference about the Single Market, or we could go all the way.’
Burnham’s underlying aim appears to be to reverse Brexit. He unequivocally claimed that ‘Brexit has caused more harm than good, and I think around 60 per cent of the British public agree with that statement.’ He has even suggested that rejoining could feature in Labour’s manifesto at the next general election, which would in effect make the general election an unofficial referendum on rejoining the EU.
In keeping with Rejoiner rhetoric, Burnham speaks not of the economic realities of Brexit, but with a vague perception – or even a sentiment – rooted in the Remain campaign’s 2016 warnings of economic harm. In recent years that perception has been normalised and lent official authority by the OBR’s assumption that Brexit will reduce long-run productivity by 4 per cent. But, as contributors to BfB have pointed out, neither the perception nor the OBR’s assumption corresponds with reality.
Nevertheless, there is a consensus amongst the Labour front ranks, and in No. 10 itself, that Brexit has failed and ought to be undone. Sir Sadiq Khan, the Mayor of London, has insisted that Burnham must begin preparing to rejoin the EU now. Prominent Rejoin voices such as Ben Judah see no conflict between Burnham’s desire to decentralise political power and his openness to ceding sovereignty to Brussels, and assume that the EU would readmit Britain without major concessions, such as adopting the euro. Of course, when Burnham talks of taking back control, he means socialism not sovereignty.
Despite Labour’s general Rejoiner consensus, the Business Secretary, Jonathan Reynolds, has expressed his concern that rejoining the Customs Union would be a mistake, foregoing the ‘opportunities around the rest of the world that we’ve [now] got’. Where Reynolds recognises the freedom of choice in trade policy that Brexit has enabled, Burnham sees Brexit as ‘a question just hanging’ – not an opportunity to expand Britain’s options, but a problem to be minimised and resolved by surrendering this freedom.
What we’re reading:
Roger Bootle in The Daily Telegraph: Rejoining the EU is not a silver bullet. It would be a costly mistake. Roger Bootle sets out the costs and practical obstacles of rejoining the EU, and why the history of UK-EU relations shows that rejoining is unlikely to work.
Madeline Grant in The Spectator: Britain is entering its Rococo period. Madeline Grant borrows John Ruskin’s dislike of Rococo excess to diagnose the condition of contemporary British life as ‘late Rococo incompetence’. She argues that events which would once have shocked us for days have become a ‘tidal wave of depressing or destructive acts’ that we now accept as the new normal: ‘The excess of bad news, government ineptitude and baffling decisions made by the state is now so great that we are struck dumb, incapable of meaningful reaction.’
