How much has Brexit cost us?

Reuters Square, if its still called that in black and white.

While posting my notes on my reference back for Labour Conference I fell back on the OBR statistic that Brexit had cost the UK 4% of GDP. I thought a chart would have been helpful and so went looking for one.

The NIESR published an article, Revisiting the effects of Brexit, which now they’ve archived it, no longer has the chart they made from the model, but google search can still find it today.

Their model tries to disentangle the effects of the COVID slump, and the article, dated 2023, says,

These estimates suggest that Brexit had already reduced UK real GDP relative to the baseline by just under one per cent in 2020 as consumers and businesses adapted their expectations even before the TCA came into force. Our estimates further suggest that three years after the transition period, UK real GDP is some 2-3 per cent lower due to Brexit, compared to a scenario where the United Kingdom retained EU membership.

 …

#Lab25 will get to debate rejoining the EU

Labour Conference 2019 from the balcony

At the General Committee of Lewisham North last night we agreed to send a motion calling for the abolition of the two child benefit cap, and also proposed a reference back of the NPF report. I intiallly proposed the words in a blog article posted last week. This article repeats some of the text of the reference back and my notes for my moving speech, and right of reply, as it was opposed by both those who think that being outside the EU is a good thing, and those who fear Farage and think the time is wrong.

The crux of the reference back is,

Conference calls on the NPF to look beyond the ’24 manifesto commitments with respect to the EU relationship and to press for faster re-alignment with the EU single market within this parliament and to examine the possibility of rejoining  the European Union being a manifesto promise for the next general election.

Here are my notes, in moving the proposal,

The NPF report talks of much progress but draws little conclusions. It makes much of the UK-EU summit in May, which itself was inconclusive. No agreements were made. Not even on the softest of targets, Defence.

This reference back calls for the NPF to consider looking beyond the ’24 manifesto commitments with respect to the EU relationship and to press for faster re-alignment with the EU single market, within this parliament, and to examine the possibility of rejoining the European Union being a manifesto promise for the next general election.

In addition to its lack of ambition, the report fails to mention the reset meetings requirements that the UK must fully implement its commitments under the “withdrawal agreement”, the Windsor framework and the “Trade and cooperation agreement” and that, as said, it failed to conclude any improvement in the formal relationships between the United Kingdom and the European Union, including on youth mobility.

The OBR estimates that exit from the single market has cost the economy 4% of its value, this is not something that a growth mission driven government should leave on the table.

The fundamental reason for the UK’s poor economic performance is a lack of investment. Rejoining the single market would ease the entry of European capital into the UK investment market, and help to remediate the unpatriotic and global nature of the shrinking London capital markets which leaves the primary source of domestic investment to retained profits. It would also make the housing market goals easier to achieve as in order to build more houses the UK needs skills, effort and bricks from abroad.

A changed mood disguised by Brexit adjacent red-lines are not enough and chasing the dying Brexiteer vote is not a strategy for success.

But when making policy, we need to consider what’s right and not just what’s popular.

Please send this to Conference so it is at least debated and visible.

And my notes of my right of reply,

The referendum decision was taken three elections and 9 years ago. It is a dead and failed mandate.

For those of you who hang onto your line from the seventies, you were wrong in 79, wrong in 2016 and wrong today; for those that argue it’s a barrier to a socialist government may I remind you of the author of  the doctrine of “Socialism in one country”.

For those that fear giving Farage space, you can’t fight him by agreeing with him. He’s wrong on Europe and wrong on immigration and we need to say so.

For those who fear Reform’s reaction, when making policy and making promises, at least those we mean to keep, we should consider what’s right and not what’s popular with people who will never vote for us.

Our Spanish comrade suggested this is premature, he argues the Party needs an agreement about how to rejoin and that will take us time. I say what  better way to start the conversation than by taking it to Labour Conference.

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Brexit, reset or stall?

the staircase at Lancaster House

Last week, the UK and the EU met at the most senior levels in what the labour government has described as a reset of EU relations. As usual, the conclusions are best documented on the EU website where they published a joint communique. Certainly the results of the negotiations have changed few minds. While I consider that the best result would be if both sides walked out thinking they’d won, my feeling is that this was a draw, although no major breakthroughs occurred and a huge opportunity wasted, primarily due to the lack of vision and ambition on the part of the Labour government.

The words on defence co-operation are the most concrete, although further negotiations are required and while UK companies will be able to bid for work from the EU, HMG will have to contribute to the budget.

The relegation of words by recasting youth mobility as youth experience, illustrates the stubborn recidivism of the labour government and the fact is, that there has been no movement by the EU on creative workers’ freedom of movement.

The two sides have agreed to continue to talk about an agricultural deal, and greater cooperation in the electricity, carbon and energy markets. The agricultural deal is crucial so reducing paperwork checks both between Great Britain and the European Union and also between Great Britain and Northern Ireland.

There are several paragraphs on internal security and judicial co-operation which mention Europol but not the issue of the Charter of Fundamental Rights. The UK has for decades, under both Tory and Labour governments been reluctant to engage with the Charter and it seems remains so; the children of fascist and Stalinist societies put more faith in a basic law than parliamentary sovereignty. I am unclear that these paragraphs are anything more than aspirational.

The press release/communique makes clear that its consequential programmes and agreements build on the Withdrawal Agreement, including the Windsor Framework, and the Trade and Cooperation Agreement and require their “full, timely, and faithful implementation”. The UK still has some work to do there as the Commission are pursuing eight infringements by the UK government of the existing agreements. This is a critical red-line for the EU.

I am interested how the closer to reality and the single market the proposals are the stronger the UK commitments to dynamic alignment, the CJEU and financial contribution are; it would seem we really are joining one agency/pillar at a time.

As many commentators, not least the UK Government observe, Starmer’s redlines have not been breached but little more progress could have been expected without some compromise and £140bn worth of GDP is at stake.

If we are to consider this as a football match, it’s probably a draw. The EU have ensured the current treaties are confirmed and that any entrance to the single market includes dynamic alignment, CJEU judicial authority and financial contributions, in exchange, the UK have obtained agreement that the Commission will engage in pre-legislative consultation. This is an important breakthrough. The defence agreement is necessary, but as noted the British government will need to contribute to the European Union’s defence budget to bid for arms contracts. The rest of the agreement are statements of ambition. The section on borders and judicial cooperation, I need to read again as I am unclear of the direction all future negotiations. Any agreement satisfactory to the UK Home Office and the European Union equivalent is not likely to be satisfactory for those of us who believe that racism fuels much of the immigration control debate.

The Tories and reform claim the agreement is a betrayal of the nine year old mandate, rejoin campaigners close to the Labour leadership such as Best for Britain, the European Movement, the LME and Sadiq Khan claim it’s a step in the right direction, the FT say and I agree that,

Labour arguably wasted some of the post-election goodwill it enjoyed last year in Brussels, through the paucity of its own ambition and its manifesto red lines insisting on no return to the EU single market, customs union or freedom of movement. Its new reset at least attempts to push up to the limits of some of those red lines.

The FT EB

The Economist also state that more is needed. [Also at archive.ph.]

It’s a better result than last time when the EU told the UK to do better.

The problem is that the UK wants a Swiss style deal where they can focus on those areas of maximum benefit to the UK economy. The EU want commitment to the full acquis. Squaring this circle is probably impossible just as fixing Brexit is.

Does it make rejoining more or less likely? I suggest neither, but the problem is the current Labour leadership and its stubborn and failed pursuit of the dying Brexit voter. …

Labour’s new deal for Europe

ec-london

This is a comment on A new deal with the EU is exactly what Britain needs. Here’s how Labour will achieve it | Nick Thomas-Symonds | The Guardian  – www.theguardian.com, I have made it with the help of diigo, where the headline comment on my bookmark, part generated and part selected from the article says, ‘via Comment is free | guardian.co.uk, subtitled, nonsensically, “This isn’t about politics – it’s about pragmatism. Working with our allies will make British people safer, more secure and more prosperous.”‘.

The article says nothing new and repeats the isolationist nonsense fantasies of Labour’s triangulators that Brexit can be fixed. It includes the phrase “honour the referendum” despite the fact that it was nearly nine years ago, and we’ve had three general elections since then.

Quotes and comments

We are equally confident in what the UK can offer in return. It is a politically stable country, and the government has a huge mandate, with more than four years left to deliver our policies. This stability has already inspired the confidence of businesses across the world, unlocking tens of billions of pounds of long-term investment.

  • The statistics aren’t in yet to substantiate investment numbers,

Labour is rising to meet the challenges in this new era of global instability.

This is not about ideology or returning to the divisions of the past, but about ruthless pragmatism and what works in the national interest.

When it comes to security, Nato is the cornerstone of our defence.

  • Really? A fantasy of the Labour Right, NATO’s gone, for at least four years, but Trump’s isolationism has not come out of the blue.

All of this will be framed by the very clear red lines we set out at the election. We won’t return to the arguments of the past: there will be no return to the single market, the customs union or freedom of movement.

  • Well, it won’t work then. There isn’t a deal in which the UK wins at the expense of the EU. If only because, the queue of member states asking for their own opt-outs would be 25 long.

We will only agree an EU deal that meets the needs of the British people and respects the 2016 referendum result.

You can’t do both if you believe honouring the referendum means staying out of the EU but the referendum mandate was dishonestly won and is now nearly nine years old; I estimate that about 4½ million voters have died since then. …

The pan-European Mediterranean convention and EU/UK relations

The pan-European Mediterranean convention and EU/UK relations

This blog article comments on the reactions to Marco Sefcovic's suggestion that the UK as part of the negotiations to improve relations between the UK and the EU should consider joining the pan European Mediterranean convention (PEM); . Sefcovic is the commissioner responsible for trade. The rest of the article looks at HMG's lukewarm response and looks to explain what the PEM is. For more, press the button ...

Win/Lose vs Win/Win & Trump

Win/Lose vs Win/Win & Trump

I was pointed at an article on Trump's negotiating style, ,and was advised, that, "Everybody I know should read this accurate and enlightening piece...". It is probably the best, most cogent and elegantly simple explanation into the inexplicably destructive negotiating processes of the President, by Prof. David Honig of Indiana University. Fore the original article, use the "Read More" button ...

Growth, institutions and Brexit

Growth, institutions and Brexit

Several commentators on the UK budget, including the OBR, have suggested but there’s insufficient growth stimulus planed. The OBR predict that the economy will grow slightly less than under previous plans; I don’t know how this can be when the proposed deficit is £89bn. They also however predict that the effect of Brexit his -4% of GDP and yet no one in parliament, except for Ed Davey has mentioned this as a growth opportunity.

The OBR and the Bank of England are both institutions designed to protect economic policy from democratic control. Time to abolish one and reform the other. …

Starmer, Berlin, rejoineu and delay

Starmer, Berlin, rejoineu and delay

Even the press and some commentators noticed that Kier Starmer visited Berlin and repeated his Brexit red-lines and yet claimed to want to reduce trade frictions between the two countries.

Germany is not in a position to negotiate this. Trade with 3rd countries is an EU competency. Starmer’s growth mission will be easier if the UK were to rejoin the single market [and customs union]. This involves him changing his mind, and talking to the Commission [FT] to the Commission in Brussels.

The British people would seem to want to rejoin the EU but the Labour Government and too many experts would seem to be still pursuing the chimera of a mercantilist patchwork trade deal which  must be called “Cakeism” in the UK and  will be called cherry-picking  or extrawurst in the EU. This is not available, neither is a swiss style multi-treaty deal.

Starmer’s government seems to think that revamped Anglo-German military treaty will help the cause of reduced friction trade. There are three problems with this. Just as one shouldn’t start trade negotiations in Berlin but in Brussels, military co-operation needs to involve Poland which now has one of the largest armies in the EU. Since the British ambitions are broader i.e. beyond military co-operation  and to include intelligence sharing and cybersecurity but since the UK was kicked out of Europol as part of Brexit because it no longer recognised the EU’s Charter of Fundamental rights, intelligence sharing will need a common recognition of privacy and judicial rights of citizens. The children and grandchildren of fascist and Stalinist societies will not permit their governments to outsource surveillance to an unrestricted and and unaccountable body. The third problem is that suspicious member states will characterise the UK position as wanting freedom of movement for weapons and ammunition, but not of people, and a single market for guns but not for anything else.

As a counterpoint, Richard Bentall writes  in a thread where he states that “the only way to slow it [rejoining the EU] is by saying it’s too difficult”, to which I add that holding out for better opt-outs is merely delaying rejoining. As a reinforcement, Blade of  the Sun argues that rejoining is simple,

  1. You apply to rejoin.
  2. They tell us what you need to do.
  3. You do it.
  4. Rejoin

And it is that simple, no opt-outs, no special deals but I fear that this Government are not yet ready to drop their dreams of a swiss-style/cakeist deal supported by too-clever academics and journalists, who are looking to ‘hack the treaties’. They need to make their mind up, do they want to be seen to be clever, or change the world; too often this is a choice and one that many academics and journalists fail to address or get wrong. …

The colour of my passport

The colour of my passport

I’m losing hope on my next passport being burgundy.

The only way the UK will rejoin the European Union he’s when it’s ready to be a good citizen.

It is clear that Labour’s leadership despite the opinion polls, have a view that better terms short of membership can be obtained. Firstly, i don’t think it’s desirable, and secondly, I’m not sure it’s available. All the intelligence suggests that the EU has no interest in replicating the Swiss arrangement and that the single market is indivisible.  

Pretending that the Tory deal has failed due to its design and that all it needs is “grown ups in the room”, a view reinforced by numerous academics attempting to prove how clever they are by designing a new relationship, Is unlikely to succeed.

At the moment EU accession requires a unanimous vote on the EU council; this would mean the UK reacquires its political rights and full access to the subsidy programmes. This is unlikely to happen while we have a big bill poster signposts that we proposed to continue to behave as we did before we left.

It looks as if the people are ready to rejoin, but without leadership and a vigorous explanation that the opt-outs have gone and we need to be good citizens within the union I think it unlikely we will persuade the EU that we are suitable candidates.

The EU would almost certainly require a referendum to show that the government mandates is supported. It’s been said many times, that the EU don’t wish to play okie cokie with us.

It is sad that the elections to the European Parliament will have damaged both programmes for reform of the European Union. The Federalist proposition will have been weakened by the losses to the Greens and ALDE (Liberals) in the EP, and the growth of the ECR, who are campaigning to return competencies to the member states, and the alternative, “Sailing the High Seas”, which I characterise as Prix Fixé as opposed to a-la-carte, will have its support weakened by the French and German results where the sponsoring Governments both lost support.

I am of the view that StHS with it flexibility would be a better target to rejoin than the current EU or the Federalist alternative but rejoining the EU is needed to fix our economy and our democracy. People’s sovereignty requires access to human rights courts, and the UK needs an internal subsidiarity agreement, which I hope implementing the Brown Commission proposals will give us although the Labour manifesto promises  the devolution without the funding and structural reform to embed such devolution. …