The Brexit mission is largely accomplished, now the hard work begins

The Brexit mission is largely accomplished, now the hard work begins

by Ewen Stewart
article from Monday 4, January, 2021

TEN YEARS AGO, it is questionable if the bookies would have even offered you odds on the UK leaving the European Union. The number of MP’s in Parliament supporting withdrawal, as opposed to nebulous moaning perhaps, on a good day, numbered six with a further dozen peers picking up the gauntlet. Britain leaving the European Union really is an extraordinary lesson that one should never give up in the fight for what is right. We should savour this victory which until so recently seemed so impossible. 

The deal Johnson has signed is far from perfect, but I for one think the deal needs our support. It also needs backbone to ensure what we have gained is not tossed away through either civil service ineptitude or a slavish copying of international rules with a gold plate on top under the name of British exceptionalism. Much will depend on our will and determination to make this work to assert a sensible approach that is appropriate for Britain. I am confident that is a battle, in time, we can also win.

Brexit is the start of a process, not the end and we are now in an immeasurably stronger position to reconnect with our democracy than before 2016. Just imagine if we had lost that referendum 52-48. There would have been no break on yet more integration. There would have been no second chance with Brussels arguing it had moral authority for its Federal State. It was a darn close run thing but that vote has changed history not just for Britain but also for the EU. Make no mistake, it is a severe jolt to its self-confidence and ambitions, however the EU’s cheerleaders dress it up. 

Further, the long term impacts of Brexit, for the EU may be profound. It has taken away the inevitability of Federation and provides a precedent for others to follow, in the years ahead, should they wish. I guess other countries will be watching our progress closely.  

The UK provided balance and a minor break on the Franco- German axis in the EU. That has now gone. The EU now is effectively that axis and how the smaller more liberal states in Scandinavia and Netherlands, as well as the more Conservative Visegrad states, react to Franco- German dominance shall be of great interest to us. 

Certainly the EU looks certain to remain the low growth, high unemployment global bloc it has become and the risk is it turns in on itself with a mercantilist instinct further undermining any long term potential. Britain leaving may not be an existential moment for the EU but it is undoubtedly a watershed undermining its confidence. 

The devil of this deal clearly lies in the detail and it is less than ideal that the agreement should run to over 1000 pages – and includes far too much prescription and legal clarification for my liking – but the UK will have fully left the EU and have reasonable scope to deviate, over time, in terms of regulation and law with tariff free access. The full nature of the arbitration process over the level playing field needs watching but the red lines over withdrawing from the ECJ and merely having to slavishly adopt EU regulation without giving approval, as members of EFTA largely do, as well as leaving the CAP and the Foreign Policy apparatus, has been achieved on paper at least. 

While I have significant concerns over the status of Northern Ireland, as it remains a sovereign part of the UK but bound by much EU regulation and Single Market membership – and also the fishing deal, which certainly for the first five and half years looks weak, I am prepared to give the Prime Minister the benefit of the doubt. While I would have had no worries about no deal and ultimately that would have been a cleaner option there would have been increased risks to the UK Union given Sturgeon’s posturing and the support of the population as a whole if there had been a period of increased tensions. Now all Sturgeon can find to complain about is perceived risk to seed potato farming! Johnson inherited a very weak hand, from an outrageous Parliament and has, in very difficult circumstances, largely delivered.

That said, trust is low. The EU’s behaviour has been less than impressive in the way it has attempted to treat a former partner who is its principle ally in trade, foreign and security policy and with whom it shares a cultural root. The EU is a legal construct which is all too quick to resort to the courtrooms and I suspect it will quickly try and set markers with a cynical attempt to try to reign in UK sovereignty. We must remain vigilant and we shall watch closely to ensure the arbitration process is indeed equitable.

For the first time in 47 years our politicians are now wholly accountable to us. They cannot stand behind the excuse that power is made elsewhere. They are now responsible. There is little doubt, as power has seeped away from Westminster, the quality of our political response and that of Whitehall has left something to be desired. With this new-found authority there is no excuse for poor governance. We expect, in time, with increased power will flow better and more accountable decisions. 

British independence has been achieved at the most difficult of moments, in the middle of a pandemic that has reaped havoc economically, politically and socially. This is a threat and an opportunity. Now is the time to explore how we can use these new freedoms to offer constructive competition, less prescriptive government, and an increased trust in the people. 

That is the challenge. Will our politicians come up with creative, light touch growth orientated ideas to increase the cake – or will the civil service simply try and command and control from the centre incorporating regulation and gold plating new rules dreamt-up in Brussels?  

This deal is a start. It offers the opportunity for renewal. It is far from perfect but under the circumstances offers the route map to rebuild national confidence, revival and prosperity.

Ewen Stewart is a City Economist whose career has spanned over 30 years. His consultancy Walbrook Economics specialises in the interaction of macroeconomics, politics and capital markets and advises major pension funds, asset managers and hedge funds. He is Director of the think tank Global Britain and his work is widely published in economics and political journals. 

Photo of Ladbrokes, turf accountants, by Edwardx - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=52282285

 

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