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24 November 2022

Why Brexit is back

People have realised how fragile Brexit Britain is. Politicians will need to catch up.

By David Gauke

The mood change is unmistakable. It was only a few weeks ago that mentioning Brexit – and the economic damage it is causing – would have you marked down as a bore or a fanatic (or both). Broadcasters avoided the topic because even to say the word could offend supporters of Brexit and provoke accusations of bias. The country had moved on, old wounds were not to be re-opened.

The collapse of the Truss administration changed everything, even though the cause of her downfall was not directly related to Brexit. Both her success in making it to Downing Street and her dramatic fall once there demonstrated a pattern of behaviour we have seen before. Ideology trumping pragmatism; the outsized influence of hardliners; a willingness to take economic risks. The public could join the dots. The market crisis that followed the mini-Budget in September also made it all too clear that Brexit Britain is economically fragile.

There has been much discussion about a YouGov poll that found only 32 per cent of the public believe that we made the right decision to vote to leave the EU in 2016, whereas 56 per cent thought it the wrong decision. These are striking and unprecedented numbers but some of the 56 per cent may take the view that “we are where we are” and that even though the decision was a mistake, re-opening the question now would also be a mistake.

For this reason, there is another polling question which is more revealing: “should the United Kingdom join the European Union or stay out of the European Union?” Since May, rejoin has been in the lead and currently enjoys a 56-44 advantage, when those who say they don’t know are excluded. Given that no mainstream political party (at least in England) advocates such a policy, that is a remarkable number.

The economic failure of Brexit should be very bad news for the Conservatives given how the whole enterprise is inextricably linked to the party. There must be some question as to whether Conservative unpopularity is contaminating the perception of Brexit as much as the other way round. Even so, if the nation has turned against Brexit, the Tories will have lost the second of their two greatest assets at the last general election (Jeremy Corbyn being the other).

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The one electoral crumb of comfort for the Tories is that Labour is placed in a dilemma. Its core voting base will come overwhelmingly from the 56 per cent who favour rejoining the EU, but the party leadership agrees with the Tories’ analysis that the key voters at the next general election are the Leave voters in the Red Wall who switched to the Conservatives in 2019. Those voters have abandoned the Tories for the moment to a greater extent than they have abandoned Brexit. Any hint that Brexit might be reversed, fears Keir Starmer, and those voters might be tempted to give the Tories another chance.

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A precarious ceasefire holds. Sensible ministers know that Brexit is doing more economic harm than we can afford; they are increasingly half-hearted in hailing the “benefits of Brexit” but cannot challenge the true believers in their party (as the response to the floating of a “Swiss-style deal” shows). The opposition knows the reality but believes it cannot be exploited successfully.

Is this sustainable? Over the next two years the Office for Budget Responsibility predicts an extraordinary 7 per cent fall in living standards and the OECD has said this week that only Russia will have a worse time of it economically than the UK among the G20 economies. With a greater media willingness to draw a link between poor economic performance and Brexit (plus the continued demographic impact of elderly Leave voters dying), the likelihood must be that support for rejoining will grow and intensify.

There is a pro-European party that could exploit this opportunity, of course, but the Liberal Democrats, having clearly defined themselves as such in 2019 and fluffed their chance, have reverted to the role of being a protest party. Not upsetting eurosceptic voters in West Country target seats is more important than taking the lead on this issue.

It is not just the curiosities of our political geography and alignment that make this debate so difficult. Finding a more pragmatic relationship that is negotiable with the EU, economically of substantial benefit and politically defensible will be immensely challenging.

The EU will not go for a “Swiss-style deal”. Labour’s approach involves a degree of cherry-picking and does not resolve the biggest economic problems and, speaking from experience, a compromise is vulnerable to attack from both sides. Joining the European Economic Area, for example, while economically beneficial, would make us a rule-taker (which is particularly problematic for services, as David Lidington has pointed out), as well as accepting freedom of movement, which is politically very contentious. It does not look like a sustainable answer.

There is no immediate prospect of the UK rejoining the EU. The EU would not even consider an application unless it believed that the UK would be reconciled with membership for the long term. Given the position of our political parties, that is a long way off. But if Brexit continues to disappoint and support for rejoining continues to grow, one way of another, it will be the politicians who will eventually have to adjust. Expect to hear more about the case for rejoining in the years ahead.

[See also: Keeping quiet on Brexit is a shrewd move for Labour now, but a strategic disaster in the long term]

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