Quite on purpose, I left Brexit alone in 2020. For the last half a decade, the word has hung around British politics like a bad smell, and following the General Election at the end of last year I decided to avoid the issue where possible until either a deal, or no deal, was confirmed. On Christmas Eve an agreement was finally made for a trade deal between the United Kingdom and the European Union, and thus now feels like the right time to talk about it, and make a more general reflection on the issue that has dominated the last few years, and will in all probability dominate politics for years to come.
A “no deal” Brexit has been averted. To be perfectly honest, I never believed the prospect of crashing out of the EU without a deal was ever a realistic one, but nevertheless it must be stated that the existence of a deal, as opposed to the lack of one, is a less bad outcome than what could have been possible. The landslide majority Boris Johnson’s Conservative Party won last year, plus the begrudging support of Labour’s votes to avoid a “no deal” scenario mean that the deal will definitely pass through Parliament, and will come into force in the coming days.
I have heard people talking about “relief” that there is a deal, but in my mind that is far too strong a word. A bad outcome (as I’m about to explain) as opposed to an even worse outcome should not spark relief, but rather disappointment and scorn that a bad outcome has been reached. It would be like someone saying “I was going to detonate a bomb in your house, but on balance I’ve decided to set fire to it instead” and you turning around and saying “oh, what a relief”.
It will cost the British economy £200bn next year, or everything the entire fishing industry will make until 2255
So, what is the deal, and why is it so bad? The deal itself is a rather thin Free Trade Agreement which allows for tariff-free movement of goods between Great Britain and the European Union. That in itself is a consolation for businesses which trade goods with the EU, as they have averted the disaster of having to pay tariffs on exports. They will, however, have to partake in the time-consuming exercise of filling out customs declaration forms for all of those exports and imports. United Kingdom Driving Licences will also still be valid in the EU, which is a disaster averted for British commercial drivers.
This, however, is where the “good” news ends. The deal makes scant reference to the services industry, which is worth about 80% of the UK economy. There is no binding agreement at all on financial services, and different sectors and EU member states are already putting up barriers to the British services industry. UK nationals will not be able to sell actuarial services in Italy or construction services in Cyprus, for example, or be surveyors in Bulgaria or tobacconists in France, among sundry other barriers. British citizens will need a visa if they intend to be inside the European Union for more than 90 days in a 180 day period, will be frozen out of EU initiatives such as the Erasmus+ scheme, and British airlines will no longer to be able to fly between EU airports (though will still be able to fly from the UK into the EU).
The lack of protection offered to the services industry is estimated to lose the British economy £200 billion next year, or as it’s also known, everything the entire fishing industry will make until at least the year 2255. It will be a bigger hit to the British economy than the 2008 financial crash, and with a far less competent government to deal with it than back then – especially as this coming economic downturn is completely of their doing. Furthermore, the scant protection that the deal does provide will only exist so long as those goods adhere to EU regulations – the EU reserves the right to impose tariffs should those rules not be adhered to, and the UK will no longer have any say in the creation or policing of said regulations.
A “Norway-style” deal would be much better than the Moldova-or-Vietnam-like deal the UK just signed up for
Boris Johnson’s belief that this deal somehow closes the book on the UK’s relationship with the EU is misguided. The country was and still is split down the middle on the issue, and people will be unwilling to simply give up their opinions now this derisory deal has been set upon them. For that reason, I see two potential outcomes to this mess: the country will either spend the next decade and more in a tailspin over Europe, carrying on arguments over “sovereignty” and “fish” while becoming less and less relevant on the international scene, or it will join EFTA.
What is EFTA, you ask? The European Free Trade Association is a group of four nations (Norway, Switzerland, Iceland, and Liechtenstein) which have access to the European Single Market without being member states of the EU. This is the so-called “Norway-style agreement” which was floated before the referendum in 2016, and potentially coupled with a customs agreement with the EU similar to that of Turkey would provide the best possible outcome for British businesses and British people outside of the European Union.
Of course, membership of the EU would have been the best possible outcome for British businesses and people, but that ship has long since sailed. The political failures of “remainers” in 2019 mean that the political capital required for the UK to rejoin the EU would simply not be worth it for any politician or party as things stand, and probably not for another generation at least. EFTA, however, would be an acceptable compromise for most reasonable people, and would represent a positive step for the UK economy – a “Norway-style” deal would be a step down from the “France or Germany” style arrangement we’ve just walked away from, but would of course be much better than the Moldova-or-Vietnam-like agreement that the government have signed us up for.
The next decade, therefore, will be crucial for the United Kingdom. With a damaged economy and an ageing population, it will have to choose between continuing and deepening its self-isolation, and returning to the European fold. I’ve lost faith in the current British political class to make the right decision, but should they have a change of character, the path to that right decision is as clear as it always has been. Brexit may be done, but the British argument about the country’s place in Europe will continue for a long time yet.
