Brexit one year on: so how’s it going?
On New Year’s Day the UK will have been fully out of the European Union for a year: out of its political and legal structures, out of its single market, out of its customs union.
This was what Boris Johnson and Michael Gove – who led the Leave campaign – had wanted. No awkward halfway house like Theresa May had negotiated. No Brexit light. Out completely. Gone. Brexit well and truly done.
It was only with a clean break, they told us, that the UK could unleash its full potential, and wrestle free from the chains of EU regulation and bureaucracy.
Liberated, we could take back control of our borders, our money, our laws. We could look outwards to the world in a new age of discovery, striking trade deals far away from the EU, creating fresh levels of prosperity for Global Britain.
So a year on, how is it all going?
The resignation last weekend of Lord Frost, the minister overseeing Brexit, gave a clue that all was not entirely well. “Brexit is now secure … the challenge for the government now is to deliver on the opportunities it gives us. You know my concerns about the current direction of travel,” Frost told the prime minister in his resignation letter.
There are suggestions from some in government that Frost – a Brexit purist and fanatical deregulator – came to suspect Johnson had no real plan, no real detailed idea of how to make Brexit work beyond slogans and soundbites.
He was also frustrated at the deadlock over Northern Ireland. A year into Brexit proper the UK is still at loggerheads with the EU over the Northern Ireland protocol that Frost and Johnson themselves negotiated and hailed as a good way to solve difficult border problems, as part of the withdrawal agreement.
Whatever issues were riling Frost the most, delivering on Brexit promises is proving a lot harder than making them had been.
What is clear is that, initially at least, Brexit is making us poorer. It has contributed to labour shortages in many business sectors as EU workers have returned home.
There are grievances that run deep in specific sectors that were promised much and got almost nothing. Fishermen feel betrayed. Farmers are uncertain that a replacement subsidy and payments regime will be all it is being cracked up to be. Small businesses which export to the EU have been hit by extra costs and paperwork.
The extent of economic damage from Brexit has been made clear by the Office for Budget Responsibility, which predicts that leaving the EU will reduce our long-term GDP by around 4%, compared to a fall of around 1.5% that will be caused by the pandemic.
Rather than boosting our trade, Brexit is holding it back. Goods exports were down 14% year on year in the third quarter of 2021 according to the Office for National Statistics, with both exports to the EU and non-EU destinations suffering.
According to the Food and Drink Federation, UK exports of food and drink are down £2.7bn (-15.9%) in the first three quarters of 2021 compared to pre-pandemic levels. This is largely due to a drop in sales to the EU of £2.4bn (-23.7%) resulting from new barriers to trade with the EU and the ongoing effects of the Covid pandemic.
And this is before new rules on imports from the EU will be implemented in January, which business leaders say will lead to further falls and delays. Then food products from the EU will face extra physical inspections from the summer.
Disentangling precisely what has been caused by the pandemic and what is the result of Brexit is difficult. For Johnson the coincidence of Covid and Brexit has proved convenient in one sense, shielding him from blame and obscuring the picture. But economists broadly agree that the long term economic hit from Brexit will be far greater than from the pandemic.
Another central promise of the Leave campaign was that the UK would take back control of its borders. But in a year of tragic loss of lives in the Channel, and unseemly arguments between the French and the UK over who is to blame, that claim has looked utterly hollow. Refugees living in northern France have said Brexit has made it easier and more attractive for them to reach the UK in small boats, not less.
Refugees who have fled conflict zones including Afghanistan, Iran, Iraq and Eritrea have told journalists that the fact that the UK is no longer part of the EU makes it more worthwhile risking the dangerous crossings because they could no longer be sent back to other European countries.
Asked how Brexit has gone so far, Charles Grant, director of the thinktank the Centre for European Reform, says that, ironically, the most obvious post-Brexit negotiating successes for the Johnson government have been in areas where it has managed to stay close to the EU, not move away – such as the “rolling over” of EU trade deals. These have included agreements “rolled over” with Japan, Canada, Switzerland, Turkey and South Korea which have become bilateral ones with the UK. The only entirely new trade deal is that recently signed with Australia. The UK, he says, has also managed to secure agreement over flow of data with the EU, though this could soon be under threat as we seek to weaken privacy rules.
In other areas, Grant says the UK has been weakened, particularly in its influence and power on the European and world stages.
“Lord Frost refused to have any form of structured relationship on foreign and defence policy post-Brexit with the EU – though the EU wanted one – and we are paying a very heavy price as a result,” he says.
“We lack intelligence about what is happening in the EU because we don’t have any regular system of meetings with people in Brussels. We can’t influence what is going on because we are not in the room. On issues such as Russia, China and climate issues the British – even outside the EU – could have a degree of influence because we have good people and real expertise.”
Joël Reland, researcher at the independent thinktank UK in a Changing Europe, has worked on a “divergence tracker” which has looked at the extent to which the UK has succeeded in breaking free and replacing EU rules with its own, as Johnson promised.
What he has found is a lack of divergence in many areas and an absence of a plan.“The main message is that the UK has been talking a big game on divergence. Frost has spoken repeatedly about the long dark years of EU membership and the need for change to free up growth and innovation but it has just not been followed through. If you look at the most significant policy changes in the budget or the net zero strategy there is very little that could not have been done inside the EU.”
Reland says that in agriculture, city regulation, and areas such as green taxation and fintech, new ideas and progress on divergence are evident but in big areas such VAT little or nothing has happened. “There is no joined-up thinking on divergence strategy across government,” he says.
The reason he says is that while replacing all EU regulation sounds neat, in practice it is complex and costly for business.
“I think the UK is finding that it is really difficult to develop and there is more bureaucracy rather than less once you try to change everything,” he says. “The cost of getting all UK companies stamped with a UK mark rather than an EU mark … it is not worth the cost.”
Our latest Opinium poll shows that over 60% of people now think Brexit has either gone badly or worse than they expected. It also found that 42% of people who voted Leave in 2016 had a negative view of how Brexit had turned out so far
Getting Brexit done was the easy bit. Proving it was worth it and for the good is turning out to be far more difficult.
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