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15 November 2016

It’s now clear that Brexit means bigger government

"Taking back control" could require an extra 30,000 civil servants. 

By George Eaton

Those who first dreamt of Brexit envisioned that the state would shrink, rather than expand. Freed from the bureaucratic shackles of Brussels, a leaner UK would bestride the globe. A vote to Leave, libertarians such as Daniel Hannan and Douglas Carswell promised, was a vote for smaller government.


But “taking back control” is proving harder than it looked. Today’s Times reveals a leaked memo by Deloitte suggesting that Whitehall has been overwhelmed by the task of the Brexit and could need to hire up to 30,000 extra civil servants. (For comparison, the European Commission has 24,000 in total.) The accountancy firm, which is advising the government on EU withdrawal (though perhaps not for much longer), says that there are now more than 500 related projects – “beyond the capacity and capability of government to execute quickly”.


That Whitehall is struggling is unsurprising. The civil service is currently at its smallest size since the Second World War (391,360) and has been cut by 18 per cent since 2010. Despite this, further austerity is planned. The promised increase in infrastructure spending in the Autumn Statement will be accompanied by a squeeze in departmental budgets. But the Deloitte memo warns: “No one is treating that position as sustainable. Expectations of increased headcount are in the 10-30,000 range.” 


Should the UK, for instance, impose controls on free movement, as Theresa May has pledged, it will need to hire vastly more border guards. As a British Future report noted: “There has been a year-on-year cut in revenue spending on visas, border control and enforcement since 2011. Moreover, it is planned that borders and immigration will be a fully self-funded system by 2019- 2020 by using income from fines, visas and other fees.” After the Leave vote, that ambition now appears a distant dream.


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The government will not only need to hire more staff to cope with Brexit; it will also need to take a more economically interventionist role. Business secretary Greg Clark’s guarantee of support to Nissan set a crucial precedent. “Other major players can be expected to, similar to Nissan, point a gun at the government’s head,” says the memo.


The economic uncertainty triggered by the Leave vote has made greater interventionism unavoidable. Foreign investment and consumer spending, insiders fear, could be progressively eroded. As during the financial crisis, it will fall to the state to act as a spender of last resort.


During the referendum, the Leave campaign promised a cornucopia of gifts for voters: an extra £350m a week for the NHS, the abolition of VAT on fuel bills and an additional 100,000 primary school places. But the greyer reality of Brexit is now emerging: an expanded civil service, corporate guarantees and, potentially, continued EU budget contributions. Who would have thought that unravelling 43 years of membership could prove so difficult?