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Today marks the end of six months of Brexit landing in the real world, which provides a moment to reflect on what has happened, but perhaps more importantly what might be coming next.
It took nearly three and a half years of agonisingly circular internal political debates to reach the real Brexit “go” point, but once Boris Johnson had won full political control in December 2019, then events unfolded at pretty much breakneck speed.
The Trade and Cooperation Agreement that Lord David Frost negotiated was done pell-mell, driven by the political desire to fulfil the prime minister’s election pledge to “Get Brexit Done” and a sovereignty-first agenda that resulted in the super low-ambition deal we now have.
The deal on Northern Ireland’s trading arrangements was done with equal haste (in a matter of days, once Johnson and Leo Varadkar had their October 2019 meeting in Liverpool) and with a similar political motivation: exit at all costs, and deal with the consequences later.
This, to be clear, was not necessarily bad politics. One of the insights that emerged from the What UK Thinks/NatCen polling done six months on was the extent to which confidence in the government dipped during the period of dithering and division, but was restored by moving on.
Of course, speed has its perils: the Northern Ireland settlement is still not really settled, trade with Europe has inevitably suffered, but perhaps more importantly so has the overall ambition of the relationship with the UK’s largest trade partner.
David Frost’s refrain that the EU is still struggling to treat the UK as a “sovereign nation” — and his surly efforts to teach them to do so — have seen the EU reciprocate the UK’s low ambition. Relations are testy and the EU sticks to its “no cake” approach on everything from expanding youth mobility provisions to granting financial services equivalence, to admitting the UK into the Lugano Convention on legal services.
Ultimately the EU prioritised, often quite inflexibly, its internal political unity over mutual economic interests, and it continues to do so. The difference, as Professor Anand Menon explains elegantly here, is that for the EU, trade with the UK is a relatively much smaller slice of their pie than it is for the UK.
In short, six months on, both sides seem stuck in a rut. “Getting Brexit Done” might have freed the wheels of British politics and continued to pay political dividends for the Johnson administration, but it has not resulted in a moment of catharsis or normalisation for the post-Brexit EU-UK relationship. And the outlook is likely to be frosty, if you’ll forgive the pun, for the foreseeable future.
So what will the next six months bring? Well, in the short term there are still several bumps in the road ahead that are likely to keep the Brexit Briefing busy.
The travel restrictions introduced as a result of the Covid-19 pandemic have obscured the lack of a mobility chapter in the trade agreement. Trade groups are already hearing from members fretting over how this will impact professional services providers when they start to travel again.
Leisure travellers will also need to get used to longer passport queues, which might make things interesting in Dover, where there are only five passport lanes. For now the freight lorries have the port pretty much to themselves, but when holidaymakers start up again, and 20,000 a day can use the port at peak times, those queues in Kent everyone fretted about last year may make a belated appearance on the news agenda.
The application of Citizens Rights’ registration process is also waiting to trip up the government, which has vowed to be practical but, as the Briefing explored last week, the fear is that on past performance sometimes the system cannot help itself. As we reported today, EU member states are eyeing legal action against the UK if they do not agree that those who have applied for interim “pre-settled” status should automatically get the full rights of “settled status” when they reach the required five years of residency. This is a fight waiting to happen.
Labour shortages are another issue that is starting to bite as the economy opens up post-coronavirus and the post-Brexit immigration regime makes it impossible for industry to hire lower skilled workers, like truck drivers, from the EU. The CBI president Lord Bilimoria warned this week of a “perfect storm” facing industries like food and drink, hospitality, logistics and construction that saw many EU workers leave during the pandemic and not return. They still might, but in the interim the government is going to face growing pressure to expand the shortage occupations list and show more flexibility — in return it could ask industry to do more to embrace its skills agenda. A deal there is perhaps waiting to be done.
And then there is Northern Ireland. The EU and the UK agreed a temporary truce to the “sausage” wars this week, but while it was encouraging to see this was done by negotiation and both sides sought to put the best complexion on the deal, it is clear that it does not fix the fundamentals. Trade groups like the Cold Chain Federation and the Northern Ireland Retail Consortium which actually use the new Irish Sea border were scathing. Come October when other grace periods expire, they will face the full force of a protocol that, according to the British government, already accounts for 20 per cent of EU external border checks. Unionist leaders like Nigel Dodds dismissed the fix as of “little consequence” in making the protocol sustainable in the eyes of Unionists. Whether this situation ends in a full-on crunch, or continues as a running sore will be a critical question in the second half of this year
These are all important issues for the next six months, but it is also worth recalling that Brexit will not ultimately be measured by the successes and failures of its first year, which was always going to be bumpy. It is the effectiveness of longer term plans, such as the new subsidy control regime that the government unveiled this week, or a broader deregulation agenda particularly for future industries that will take a less precautionary, more gradated approach, that will ultimately decide whether Brexit delivers the dividend its authors have promised. The Briefing will continue to track the evolution of these agendas, and how they mesh with the EU’s own regulatory initiatives on everything from cars to climate change in editions to come.
Looking backwards again for a second, it is clear from this week’s Institute of Directors survey for the FT that this has been a turbulent six months for many companies, even if headline-grabbing queues at the Channel ports were avoided.
The IoD survey asked 651 companies to give their assessment of the impact of Brexit so far. Of those companies that trade with the EU, 31 per cent said new barriers since January 1 had a negative impact on commerce with the bloc. Just 6 per cent said trade had increased, while 58 per cent stated there was no change.
Those are pretty bleak numbers. And if applied to any other trade deal like the one Liz Truss just concluded with Australia, they would surely be considered a resounding failure.
But still, the UK’s future success will not ultimately be determined by the extent to which it has created self-inflicted drag with by-far its largest trading partner. That will depend on whether the UK, with its current political leadership, can be open-minded and strategic enough to reach a new equilibrium with its neighbourhood that allows it to prosper in an increasingly uncertain world.
And, finally, three unmissable Brexit stories