New Times,
New Thinking.

  1. Election 2024
  2. UK Politics
14 February 2023

This Brexit truce was inevitable

Hardliners may squeal, but as the economy suffers the UK needs to reevaluate its relationship with its biggest trading partner.

By Freddie Hayward

Some advice: if you want to hold a secret meeting, don’t do it during parliamentary recess. No one will have anything else to talk about.

Business leaders, Michael Gove and senior Labour politicians including David Lammy, the shadow foreign secretary, met at the country estate Ditchley Park at the end of last week to discuss how to improve Brexit. The secret meeting acknowledged the shortcomings of the withdrawal deal and discussed ways to build a closer relationship with the EU.

Some prominent Leave supporters have called the meeting a conspiracy to undermine Brexit. A secret cross-party meeting in an exclusive country retreat does, to be fair, scream conspiracy. Except that politicians from different parties talk and meet all the time.

This was, instead, yet another sign that the realisation is dawning after all these years that Brexit requires improvement. The agreement left out huge parts of the UK’s relationship EU, such as professional services and security. Constant talks with our closest neighbour are inevitable, whatever you think the outcomes should be.

Rishi Sunak says he was not aware of the meeting but he seems to agree. The government is edging towards a deal with the EU over the Northern Ireland Protocol to reduce trade barriers and ease uncertainty for businesses.

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

[See also: Xinjiang’s governor should be arrested, not welcomed by the British government]

Part of the reason for this change is a growing realisation of the economic costs of Brexit (as Andrew, Anoosh and I discussed on a recent podcast). In a fascinating interview with the Overshoot newsletter, Jonathan Haskel, a member of the Bank of England’s Monetary Policy Committee, has said that Brexit wiped out £29bn of economic output. (The interview is also worth reading for his comments on why he’s sceptical of forecasts predicting deflation in 2024 and why inflation is hitting workers, not capital, the hardest.)

Haskel starts with the fact that business investment in the UK flatlined from 2016: we didn’t need to actually leave the EU for business confidence to be knocked. Haskel then takes historical rates of business investment and models what would have happened had investment stayed at that level. He calculates that this extra investment would have increased GDP by 1.3 per cent, or £29bn. If that is right, it’s bad news for Brexiteers and bad news for Britain.

Always take forecasts, particularly those that attribute changes to a single event, with a generous pinch of salt. But Haskel’s argument fits into a broader picture of economic gloom. The Bank of England predicts that the real size of the economy will be smaller by the end of 2025 than on the eve of Russia’s invasion of Ukraine. Such economic pain will inevitably invite questions about our relationship with the EU, our biggest trading partner.

The debate over the nature of that relationship is not going away. If you hoped that six and a half years after the Brexit vote the conversation might have moved on, I’ve got some sad news: that’s not going to happen.

[See also: Right-wing newspapers are killing the Tories with kindness]

Content from our partners
Peatlands are nature's unsung climate warriors
How the apprenticeship levy helps small businesses to transform their workforce
How to reform the apprenticeship levy