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Brexit is not working for Britain, but who will fix it?

It has already reduced the UK’s GDP by 5.5 per cent, reduced investment by 11 per cent and reduced goods and services trade by 7 per cent; all told, the estimated cost to the Treasury in lost tax revenues due to Brexit is £40 billion

It has the makings of an Omerta Code, but slowly but surely cracks are appearing. As more evidence comes to light and new opinion polls suggest, there is growing realisation even among those who voted for Brexit in 2016 that it has not exactly gone the way they were promised. How exactly has Brexit benefited the United Kingdom? You wouldn’t find any minister in the Rishi Sunak government or even on the Labour front bench trying to answer that, or calling for a review or debate. The reason: what is called vote-bank politics in some countries – no one wants to alienate Brexit-supporting voters when the next general election is on the horizon.

The two other major parties in British politics – the Liberal Democrats and the Scottish National Party – have all along been against Brexit, insisting that the UK should return to the European Union’s fold. But the first major leader from Labour to call for an end to what he called the ‘vow of silence’ on Brexit is Sadiq Khan, mayor of London, whose citizens had resoundingly voted against Brexit in the 2016 referendum. Keir Starmer, his party leader, has been tiptoeing around the issue, insisting that the answer lies in making Brexit work, but chances are that more negative evidence will mount pressure on him to take a clearer stand and push for a pro-EU position, as the next election approaches (Labour is widely tipped to win it).

Khan, who was re-elected for a second term as mayor in 2019, spoke some hard truths at a Mansion House event last week. He cited new figures to present a coherent picture of the effect of Brexit: It has already reduced the UK’s GDP by 5.5 per cent, reduced investment by 11 per cent and reduced goods and services trade by 7 per cent; all told, the estimated cost to the Treasury in lost tax revenues due to Brexit is £40 billion; Britons are also paying an extra £6 billion to eat because of Brexit: that’s £210 added to the average household’s supermarket bill over a two-year period.

This is apart from the various problems caused by Brexit regulations in supply chains, movement of professionals, and the fact that over 2,000 British citizens were expelled from EU member-states between the end of the Brexit transition period and September last year (after Brexit, Britons are no longer able to move, work, settle in any EU country; same for EU citizens in the UK).

Khan said: “I was elected on a pledge to stand up for all Londoners and for our business community. That’s why I simply can’t keep quiet about the immense damage Brexit is doing. Ministers seem to have developed selective amnesia when it comes to one of the root causes of our problems. Brexit can’t be airbrushed out of history or the consequences wished away. What I’m interested in is the future – doing what we all know is right for London and looking at how we can sensibly and maturely mitigate the damage that’s being inflicted…The hard and extreme Brexit we have is a drag on growth, investment, and trade. It’s holding Britain back. Fixing it would mean the recession would be less painful and less prolonged”.

It is not only the financial district of the City of London that has suffered due to Brexit. A large number of businesses have reported a severe shortage of skills, among other issues. The City supports millions of jobs and generates billions in tax revenues, but it has been hit hard by the loss of trade and talent to competitors because of Brexit (several European cities and financial areas have been competing to lure professionals from City and relocate). As Khan noted, the number of businesses in London experiencing at least one skills shortage has now risen to almost 7 in 10, while the number of jobs held by EU-born workers has fallen by over 80,000, putting a huge strain on crucial sectors such as hospitality and construction.

Khan’s solution is a reformed relationship with Europe; a greater alignment; a shift from the current extreme, hard Brexit to a workable version; and a pragmatic debate about the benefits of being a part of the EU’s Customs Union and the Single Market. He also wants London to have a role in the UK’s immigration policy, to be able to allow the recruitment abroad of skills that are in short supply (the Home office is responsible for immigration across the UK, including Scotland, where the SNP-led government wants to set its own immigration policy).

“Europe was, is and will remain our most important relationship, but it’s in desperate and urgent need of repair. So, let 2023 be the year we summon up the political courage to rebuild those essential bridges and tear down those needless walls standing in the way of our businesses and our people,” Khan said, adding that securing a better Brexit would mean more trade, higher investment and stronger growth: “Our business community is increasingly speaking out and in growing numbers. It’s time the government caught up”.

Besides piling some pressure on Starmer to adopt a clear stand on Brexit, Khan’s robust intervention may not lead to much, except add to the growing drum-beat among the people and politicians that Brexit needs to be reviewed. Starmer was among those who voted to remain in the EU, but has blunted his views after taking over as party leader to avoid ruffling pro-Brexit Labour supporters, but that position may not last long.

In the recent rash of UK opinion polls on Brexit, a new one undertaken across the EU is also significant, and in some ways suggests that the harm caused by Brexit to the UK may have silenced elements in EU member-states who until recently were seeking to leave the EU (called ‘Frexit’ or ‘Italexit’). The European Social Survey, led by City, University of London and conducted in 30 European nations every two years since 2001, found respondents less likely to vote to leave in every member-state for which data was available.

As columnist Jonathan Freedland remarked in The Guardian: “We’re good Europeans at last. Nearly seven years after we voted to leave, Britons are finally doing their bit for the European Union. Diligently and with dogged devotion to duty, we are strengthening the ties that bind the 27 remaining nations of the EU – though not quite in the way anyone would have wanted…Europeans have taken one look at Britain since the Brexit referendum and thought: Nein, danke. They see our political dysfunction, with five prime ministers in six years. They see the way Brexit divided the nation down the middle, injecting acrimony and toxicity into our national life. They see our economic malaise, with Britain lagging behind, facing the same pressures of post-Covid recovery and inflation as our neighbours but suffering more”.

The UK returning to the EU fold anytime soon is unlikely, but we can expect Brexit to return again to the top of the agenda at the next general election, expected to be held in late 2024.

- The writer is a senior journalist based in London

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