Brexit – a new season is opening

As I have written many times, the Brexit soap opera is a gift that keeps on giving. While Brexit was supposedly done on 31 January 2020, it has become clear that the political class cannot ignore what is obvious even to the less informed public – Brexit has been a failure with lots of downsides and no upsides. Yes, some Brexiters keep insisting that the sunlit uplands are just around the corner (though we – or some of us - might get to this corner only in 50 years). In the meantime, the UK has suffered a permanent GDP shock, which also explains the strike wave gripping the UK – a distributional fight over a shrinking pie.  The NHS is all but on its knees, with access to basic health services no longer resembling that in a European country.

The degree of corruption in the Tory government is nothing but astonishing for a country that has always prided itself on strong institutions. The former chancellor of the exchequer has seemingly tried to evade taxes (and was caught), Johnson got help from a rich donor in obtaining a loan who subsequently became BBC Chairman.  The amount of money that has gone down the drain towards connected Tories in spring 2020 in the name of fighting Covid is astonishing.

To distract from the swamp of Tory corruption, more culture fights have to be started (against ‘woke’, against peaceful protests etc.) and legislative spring cleaning organised – in the form of reviewing a couple of thousand laws ‘imposed’ by the EU on the UK during almost 50 years of membership within a few months. But it is not the sovereign parliament that is supposed to do it, but ministers and civil servants – so much about taking back control! That dumping a large number of laws and rules increases uncertainty for business, depresses investment and make trade with Europe even more difficult does not matter, does it?

Given the disaster that Brexit has turned out (and as predicted by many including this economist), there are discussions of what might have gone wrong.  Why is it that the UK had not held all the cards after the referendum?  An obvious response is that the EU is simply bigger. However, it is also clear that the UK government made critical mistakes during the negotiation process. Theresa May lost all her cards after showing them – by insisting on “control over laws, money and borders” she all but excluded proper membership of the Single Market and Customs Union, which in turn allowed Michel Barnier and his negotiators to impress on EU member states the risk any concession to the UK in terms of access to Single Market would have in terms of undermining it. However, this basic and consequential mistake had its roots in the fact that everything that UK governments have done over the past seven years vis-à-vis the EU has been dictated by domestic political needs and not by diplomatic considerations. This obviously includes the fantastic deal of late 2019 that helped Boris Johnson win the elections before being denounced by himself and his chief negotiator David Frost.

So, as predicted many times before, Brexit is the soap operate that will keep giving, even if the UK’s political class would rather not.