Beware, Remainers are regrouping

The Brexit battle seems long over. The titanic debates after the referendum, in which both Remainers and Brexiteers played to sweep the board, seemingly ended with near-total victory for the advocates of a real Brexit. With a supreme effort, Britain shook itself free of the European Union and became a full democracy once again, an outcome which had seemed impossible almost until the moment it happened. 

The grand new free trade agreement we had been told would take 10 years to agree was put in place in 10 months. And the behaviour of the EU in 2021, from subverting the Northern Ireland Protocol to rubbishing the Astrazeneca vaccine, left few people interested in refighting old battles.

And yet. On the fringes of politics the unreconciled Remainers are regrouping. The #brexitshambles hashtag is seen once again on Twitter. Andrew Adonis’s European Movement says that “Brexit has failed. We were lied to. It’s time to rethink”. Nick Macpherson, the former permanent secretary at the Treasury, says “the effect on growth from Brexit is tangible”. Lord Barwell, the former Downing Street chief of staff, is even trying to rehabilitate his and Theresa May’s terrible backstop deal from 2019.

Sir Keir Starmer can see that getting too close to any of these people will make him about as welcome in the Red Wall as Vladimir Putin in downtown Kyiv. Nevertheless he can’t ignore his supporters and therefore has to say that “a poorly thought-through Brexit is holding Britain back”.

Of course there is little chance of a serious “rejoin” campaign developing in the short term. Remainer Jacobitism in support of Ursula von der Leyen as the queen over the water is just too unpopular.

The leaders of the pro-EU cause recognise that themselves. Instead, their aim is to keep us aligned with the EU, often using the Northern Ireland Protocol as a weapon. They know that if the UK doesn’t diverge much from EU law, it will be much easier to take us back in later if events work in their favour.

To do this they have to get it established in the public mind that somehow Brexit is “already failing”, and thus destroy our nerve to do things our own way. Their picture of Britain is not the one the rest of us see: living with Covid successfully, leading on Ukraine, coming out of the economic downturn faster than Germany, and with PMI business confidence levels higher than the eurozone or the US. Instead, they try to suggest that, whatever problems the world has, we in Britain have them worse.

They use any argument that comes to hand. Last autumn it was HGV drivers and the threat to the Christmas turkey supply chain. This month the story is the latest trade figures and delays at Dover (the latter caused, in fact, by the withdrawal of P&O ships). A chart has been circulating showing that our trade performance has been stagnating since Brexit.

In reality, it is almost impossible to draw any firm conclusions from the trade figures amid the noise of recovery from the pandemic, trade re-routing, and methodological change. But to the extent one can, the picture is reassuring.

To get a sense of the orders of magnitude, goods exports to the EU in the last three months of 2018 – the last relatively normal year – were £43.2 billion. In the last three months of 2021, the figure was £42.4 billion – a fall of 2 per cent. Exports to the rest of the world over the same period grew by just under 4 per cent. So maybe the short-run Brexit effect is 5-6 per cent, with every chance of catching up further as traders continue to get used to the new arrangements. Hardly the catastrophe that many are claiming.

In any case, what matters is not trade, but economic growth. Here Remainers point to this month’s OBR assessment that GDP will be 4 per cent lower in 2030 than it otherwise would have been.

This is of course not a fact but a prediction, though the distinction seems lost on many. Moreover it is a prediction based on an assumption: that higher trade causes higher productivity. But the association is just as plausibly the other way round. The link between trade and productivity growth found in many analyses of Brexit is often based on evidence from emerging markets or ex-Communist economies, where increased trade went with huge improvements in the way the countries were run more broadly. It doesn’t hold up anything like so clearly for advanced economies. Indeed, the UK’s own trade openness has grown since the financial crash, but productivity has not.

Of course, no sensible person would deny that leaving the single market and customs union has some effect on trade in the short run. I have always been clear about this. The Chancellor, Rishi Sunak, repeated it this week.

That is why it is so important to get on with our own domestic reforms to improve productivity and growth. All the levers are now in our hands and this really must be the Government’s priority in the upcoming Queen’s Speech.

Sir Ivan Rogers – another voice from the past – commented this week that “History did not end with David Frost’s Trade and Cooperation Agreement”. He is right. Most of us welcome the cooperative approach we and the EU have taken over Ukraine and would like to see more of it. Our treaty framework can indeed be developed further, in areas such as cooperation between our regulators, youth mobility, or visa facilitation for artists. (Indeed we sought some of these in 2020 but were rebuffed or only offered them on unacceptable terms.)

We should always be ready to talk about these things. For the EU, the question that will then need answering is, if the terms can be improved, why is the Northern Ireland Protocol sacrosanct?

In truth it is of course far too soon to draw any of the conclusions the ex-Remain movement would like to. Our destiny is in our hands and it is up to us to do the right things. The economist Tim Worstall noted this week that “the EU had 1973 to 2020 to show that UK membership was a good idea. 47 years. Let’s measure Brexit by that same standard.” I agree.

If we must, let’s revisit the question in 2067. Meanwhile, let’s get on with the job.

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