After three-and-a-half wasted years, a determined government is finally hammering out Brexit
My son is three-and-ahalf. He has lived his entire life in a country that has voted to leave the EU, but has not in fact left. The paralysis of our political system during his lifetime, the waste of time, is unforgivable. Instead of negotiating with the EU, we negotiated with ourselves. Or, more accurately, we tried to get Brexit past a bunch of MPs who, in defiance of their pre-election promises, used every procedural device they could think of to block the referendum result.
That point needs emphasis. The reason nothing happened for threeand-a-half years was not that there was some insurmountable difficulty in the negotiations with Brussels, let alone some intrinsic flaw in Brexit itself. The stasis was caused by Parliament.
That truth may not have been widely understood by overseas commentators, but it was grasped by the British electorate. Three-and-ahalf years ago, we voted to leave the EU. Twelve months later, we backed parties that promised to implement the referendum. On Thursday, we punished the party that turned out to have been lying when it made that promise.
Only now is it clear to Brussels that, as Michael Heseltine put it yesterday: “We’ve lost, we have to face up to that: we’re going to leave.” The EU’s favourite MPs – Dominic Grieve, Anna Soubry, Sam Gyimah, Sarah Wollaston, Chuka Umunna, Jo Swinson – have all lost their seats. The People’s Vote has shut up shop. Remainer irreconcilables did terrible damage to our constitution, disregarding precedent, violating norms, undermining the legitimacy of our institutions – all, as it turns out, for nothing.
Something else is also clear. Investment was being held back, not by the prospect of Brexit but by fear of a Corbyn-led government. Look at how the markets responded to the news that Boris Johnson would take us out of the EU next month. British firms saw their shares jump by as much as 15 per cent. The FTSE-250, which is loaded towards domestic companies, rose by 4.4 per cent. The pound has reached heights not seen since the Brexit saga began. We can now, as Goldman Sachs admits (in a turnaround from its pre-referendum warnings), expect a “backloaded acceleration” in investment.
The UK, in short, is going into these belated negotiations united, determined and with excellent economic prospects. Those Eurocrats who had been expecting a collapse here following the referendum – a prediction which was, to be fair, propagated by the Treasury, the Bank of England and the IMF – have been disappointed. The UK has in fact outgrown the eurozone over the past two years and, with the threat of a confiscatory Marxist government lifted, that divergence will widen.
I make this forecast in no triumphalist spirit. Weak growth in the eurozone is bad news for us. We want rich neighbours, because rich neighbours make the best customers. I simply observe that Britain is not going to, as the former Eurocrat Lord Kerr recently put it, “come to heel”. The stand-off of the past three-anda-half years, during which Brussels refused to discuss contingency planning for leaving without a deal, prohibited its regulatory agencies from holding technical talks with their British counterparts and declined to reciprocate when the UK guaranteed the status of EU nationals already on its territory, has not produced the results that the EU expected. Both sides took a small economic hit, but the hit to the Continental side was the more unexpected.
As the long-aborted trade talks finally begin, what should we expect? Now that Brexit is a given, we can assume that both sides will want to maximise their own prosperity. It is now clear, in practice as well as in theory, that the EU cannot punish Britain without punishing itself. The idea – still popular with a few fanatics in the European Commission – that commercial barriers might teach us a lesson has next to no support in the 27 national capitals.
Britain is not entering these talks as a supplicant. The Government has declared that 2020 will see simultaneous negotiations with Brussels and Washington. In other words, there will be no default assumption that we should mimic the EU’s regulatory norms. We shall instead consider, sector by sector, where to diverge. We might, for example, decide that there are economies of scale to be had if we keep EU standards on animal health, but that we would be better off breaking free of its restrictive rules on data.
Donald Trump is keen to conclude a deal within a year – an ambitious but not impossible goal. Britain could certainly agree a basic treaty with Brussels in that time – a zerofor-zero deal on tariffs plus some of the existing mutual recognition of services. But we may be able to achieve far more. The Irish leader, Leo Varadkar, responded to the Conservative victory by proposing “a new, future economic partnership between the EU and UK and one that’s going to be mighty and one that is going to be good for all of us”.
Indeed. Had it not been for the accidental premiership of Theresa May, and the 2017 election, we might already have such a deal. It makes me want to weep.
It seems investment was being held back, not by the prospect of Brexit but by fear of Corbyn as leader
It is now clear, in practice as well as in theory, that the EU cannot punish Britain without punishing itself