The abandoned revolution: has the government given up on Brexit?

Has the government lost interest in Brexit?

29 January 2022

9:00 AM

29 January 2022

9:00 AM

There is a lesser-known Robert Redford film, The Candidate, in which he plays a no-hope Democrat taking on a popular and well-liked Republican in a Californian election. After engaging unexpectedly well with the public and winning an improbable victory, he turns to one of his aides and asks, bewildered: ‘What do we do now?’ The question is left hanging in the air like the back end of the bus in The Italian Job.

The script might as well have been written about Boris Johnson and the Brexit referendum campaign. It is nearly six years on from that victory, and two years on from Brexit itself. And yet it is still far from clear what — if anything — the Prime Minister intends to do with his victory.

We thought we knew what he wanted from Brexit. Had he not spent the referendum campaign advocating how leaving the EU would help us open up to the rest of the world? Had he not spent his early months as foreign secretary banging on about ‘global Britain’ and how it was his mission to help Britain ‘be more outward-looking and more engaged with the world than ever before’?

Then there were the promises to take action on over-regulation, a subject which he had spent 25 years railing against and which formed an important part of the Daily Telegraph piece in March 2016 in which he explained why he had decided to campaign for Leave. The example he singled out then was of lorries, which he said could not be redesigned to make them safer for cyclists because of EU rules. There was the issue of tax, too. One of the benefits of leaving, he declared in May 2016, was that it would allow Britain to remove the 5 per cent VAT on household energy bills — the lowest rate allowed under EU rules.

How are we doing when it comes to taking advantage of Britain’s newfound freedoms? The government has negotiated new trade deals with Australia and New Zealand. There are minor differences in the deals it has agreed with Canada and Japan compared with the deals to which Britain was party as a member of the EU. In the case of a further 70 countries, EU-negotiated deals have been rolled over, but no more. There has been no deal with the US, and none, it seems, is in prospect any time soon. There are negotiations with India and an application was submitted a year ago to join the Trans-Pacific Partnership.

There are, then, at least some signs of ambition over trade — although we could be going more rapidly. Some have implored the government at least to establish some quick, basic trade deals — or even unilateral tariff removals — involving goods which we don’t make in Britain anyway. Under EU membership, for example, we were hampered in making trade deals thanks to trainer manufacturers in Italy. But we don’t make trainers in Britain — and neither do we grow oranges, avocados and many other foods which we could open to free trade without offending a single UK producer.

With tax and regulation, perversely we seem to be drifting further towards the EU model, in spite of leaving the bloc. Given the perfect opportunity to enact his proposed elimination of VAT on fuel — the prospect of bills rising by 50 per cent or more in April, as the government’s price cap is raised and sharp inflation in wholesale energy prices is allowed to work itself through — the Prime Minister has refused to act, saying there is no need for a tax cut for people who can afford higher energy bills.

What about the Common Agricultural Policy, which forms by far the biggest slice of the EU budget? Brexit gave Britain the chance to chop the £3 billion a year paid to farmers under the scheme — payments not for producing food but simply for owning land. Cut out that bill and we would be a sixth of the way to doing what it said on the side of the Vote Leave bus (‘We send the EU £350 million a week; let’s fund our NHS instead’): farm subsidies work out at £58 million a week. Yet the government has instead reinvented CAP at a UK level, with landowners receiving money for ‘sustainable farming’ and, more controversially, for ‘rewilding’. In other words, wealthy landowners will continue to receive fat sums from the public purse not to produce food on their land, just as they did under the CAP.

For years, Britain was instrumental in shaping the EU’s antipathy to state aid for industry, making it more difficult for governments to use taxpayers’ money to give companies an unfair advantage or to bail out failing industries. You might expect, therefore, an independent Britain to be moving in a more laissez-faire direction. Instead, we have the Subsidy Control Bill, the whole ethos of which is to make it easier for public bodies, including local authorities, to provide aid for favoured companies.

What about the EU’s social chapter, which Britain was allowed to opt out of when agreeing to the Maastricht Treaty but which Tony Blair later signed up for anyway? If Johnson has any intention of rowing back on some of its rules there is scant sign of it yet. No piece of legislation has been proposed along those lines, and nor should employers expect any. Indeed, if anything, we can expect more EU-style employment rules to be piled on business in coming years — the Conservatives’ 2019 manifesto, for example, promised to ‘encourage flexible working and consult on making it the default unless employers have good reasons not to’. Then there is the Animal Welfare (Sentience) Bill, which duplicates existing welfare legislation as well an imposing a ban on exports of live animals — and which an earlier Johnson might have attacked like red meat thrown to a starving dog.

As for the tax burden, membership of the EU didn’t stop us from having one of the lowest rates of employment taxes in the Organisation for Economic Co-operation and Development — with a worker on the national average wage paying 31 per cent of their earnings, compared with 47 per cent in France, 49 per cent in Germany and 52 per cent in Belgium. Anyone who fooled themselves into thinking that Brexit would free us to move to a lower tax burden, perhaps rivalling that of Korea (23 per cent) or Chile (just 7 per cent), will be disappointed — in April rates will be going up as National Insurance is raised by 1.25 percentage points. Corporation tax, too, will be rising over the coming years from 19 per cent to 25 per cent — not, of course, that being members of the EU prevented us from attracting business investment through low rates (as Ireland shows). The only EU-related tax cut we have had so far is the removal of VAT on tampons.

The one thing that can be said to have changed since Brexit is migration. EU citizens can no longer automatically come to Britain to live or work — they require visas and sponsors, and, in most cases, a job which pays them a salary of at least £25,600 a year. We don’t yet have a whole year’s data to show the effect of this — the most recently published figures are for the year ending March 2020, when 715,000 people came to live in Britain and 403,000 left, giving a net migration figure of 313,000. Migration is widely believed to have fallen since then, and this has certainly been blamed for shortages of some workers, as well as for increased wages for some British workers such as lorry drivers — although the pandemic has rendered it impossible to judge the real effect of Brexit on EU migration.

Slowing down low-skilled migration from the EU, however, is only one side of the ledger. The other side, promised as part of ‘global Britain’, was supposed to be making it easier for high-skilled workers from other parts of the world. How is that going? In early January the Prime Minister appeared to row back on promises to make it easier and cheaper for Indian citizens to come to study or work in Britain, saying that he won’t be including the subject of visas in negotiations for an Indian trade deal. So, for the moment, Indian citizens must continue to pay £1,400 for a work visa and £348 for a student visa. So much for going out of your way to attract global talent.

The purpose of Brexit, surely, was to decouple from the European model of social democracy and to become something different: either a socialist economy or a more liberal one. You can be sure that if Jeremy Corbyn had won the 2019 election Britain would be well on its way to the former. But there is scant sign of Johnson taking us anywhere close to the latter. If we were going to become simply a different brand of European social democracy, it is hard to tell what it was all for. But that is, for the moment, exactly what we are becoming: we are the Pepsi to the EU’s Coca-Cola — close your eyes and taste it and you would struggle to tell the difference. If that is all we are going to aspire to be, it is perfectly reasonable to ask: wouldn’t we be better off inside the EU?

True, we are still in a pandemic, as we have been for almost all the time since Brexitday on 31 January 2020. There has been a limit to how much other business the government has been able to get done. But at the very least we ought to have expected the Prime Minister to signal his intentions, to provide us with a vision and some kind of timetable. Instead, like Robert Redford’s character, he seems lost, befuddled by the realisation he now has to achieve something for his voters. Fewer eastern Europeans and no tampon tax doesn’t seem quite enough to justify the whole agonising business of Brexit.

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