By Ewen Stewart – 6 minute read
SEVEN YEARS AGO TODAY the UK voted to leave the EU, an event which finally happened at 11.00pm on 31 January 2020.
To say every obstacle was put in the way of leaving would be an understatement. Cameron’s Government forbade the civil service from even planning the consequences of a possible Leave vote either due to his misplaced confidence over the vote outcome, Nelsonian blindness, or sheer dishonesty, take your pick. The following scramble by the so called ‘great and good’ to redefine what people had voted for shook confidence in democracy to its core. We should remember that.
It took the near wipe out of the Conservative party, securing only 8.8% of the popular vote in the last UK participation in the European Parliamentary elections in 2019, and a subsequent ‘get Brexit done’ landslide, at the General election in late 2019, before the writing was finally on the wall for UK membership.
Subsequently, Remainers gleefully proclaim that Brexit has been a disaster, without providing any hard evidence as to why. It just has, in their view. Then conflating far greater issues like the impact of many lockdowns, the ending globally of ‘free money’ and war in Ukraine with Brexit, as if they were related. But not for the first time Remainers are wrong.
The reality is leaving the EU has made very little economic difference at all and this is backed up by trade levels with the EU that are broadly following historic pre leave trajectories, a GDP performance that is about as bad as the EU’s but certainly no worse, continuing dominance of the City and an exchange rate with the Euro and USD that has actually slightly strengthened since our formal leave date.
Sure, policy choices by this Government have been exceptionally poor, but so have the decisions in the EU – and Britain continues to outperform the EU on most characteristics. Far from being a disaster Brexit remains a great opportunity. The question is who will pick up the baton?
The reality is not much has changed, hardly a regulation has been repealed. This is not a surprise and indeed Global Britain never argued that leaving the EU would a priori be a short term positive. We said it was a process which economically would make very little difference in the short term, but had the potential to be highly successful in the longer term. Its success, or failure would depend on the policy choices made.
This seemed to us pretty obvious for two reasons. The economic impact of Brexit was always pretty small especially for non-Eurozone members. The reasons to leave were far more related to controlling an out of touch bureaucracy trampling on our way of life while leaving a bloc that over at least two generations was in structural decline largely because of the poor choices the Commission constantly made. The impact on trade, the primary economic argument Remainers claimed would be catastrophic, was always going to be highly marginal as scare stories that EU nations wouldn’t trade with us were clearly nonsense, and indeed it has been so.
Further, anyone with any understanding of legal process knows that when law is embedded it takes a very long time to unembedded it. The UK were members of the EU for just over 40 years and in that time the UK’s legal framework was thrown upside down as the likes of the late Lord Denning confirmed.
To put this in context, according to Thomson Reuters a total of 52,741 laws were introduced into UK law by the EU since 1990 alone. Such a legal torrent alters business practice, culture and habit and simply cannot change overnight, as the Remainers well know.
As an example, students of the Republic of Ireland will be aware that almost 100 years after the British left, the UK’s common law philosophy still impacts on Irish law. 100 years later. It is thus a bit rich of Remainer’s to judge Brexit on a three year basis.
Second, trade has held up pretty well as indicated by the House of Lord’s report of May 2023 with the value of UK trade with the EU reaching a record high for both imports and exports. Trend growth has hardly murmured despite the claims.
However, the long term trend for UK trade to grow trade more rapidly with non EU countries has continued, but this has been a feature since the late 1990’s which should not be a surprise as business generally follows the growth. That growth is very obviously not in the EU.
What is true – and this has been the case for 30 years and more – is that the UK runs a substantial trade deficit with the EU, £91bn in 2022 with a small surplus with the rest of the world of £5.2bn. Remainers need to ask why can the UK do relatively well with countries outside the single market when it does so poorly where the rules are apparently aligned? The answer is the EU was set up as a protectionist bloc designed to cotton wool its manufacturing with little regard to services where the UK runs a surplus. It embeds mercantilist advantage for its core members to the detriment of service based economies like the UK.
The question is why is growth so structurally weak in the EU and also now the UK compared with other advanced regions like the US, Canada, Australia and the OECD median? The answer is a regulatory noose, high taxes and ineffective and overweening public spending across all Europe, which insanely Britain has chosen to copy.
The tragedy so far has been the Government has made Britain more like the EU rather than using the freedoms to create competitive advantage. This is truly bizarre and the exact opposite of the Conservative Party’s manifesto pledges.
If the Brexit vote was about anything it was a broad desire to bring back control – control of borders, less obtrusive regulation and a desire to remain a nation. It was a cry for being left alone without Government bossing around.
What our elite has done is the opposite. Borders have never been more open, in complete disregard to manifesto pledges and the clear will of the people. What they have also done is spend, spend, spend – increasing the size of the State from 35% 15 years ago to 47% today, converging with the EU and destroying the UK’s tax advantage at the same time.
And then rather than sensibly de-regulating the Government has tried to ‘out EU the EU’ – increasing all manner of regulations primarily around net zero, with a far more draconian approach than the EU, but also around employment law, embedding ESG and other burdens.
The response of a shocked elite to the vote of ‘the little people’ has been the opposite of the cry –and the elite know it. The truth is we now need a second rupture. Rupture one was a warning – we want control back, rupture two must be to enforce that.
This country faces a new existential challenge. In comparison, Brexit is small beer. It was an important step in tacking back control, but the challenge now is national self-government for the benefit of the British people, not the abstract globalist utopia our elite seems to plan. That has no mandate at all and will be the road to ruin through a loss of liberty, freedom and stability. Three years on, the British should be proud to have cocked a snook at their masters. The next battle will be even bigger and it’s a battle we must and will win.
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Ewen Stewart is a City economist whose career has spanned over 30 years. He is director of Global Britain and a co-founder of Brexit-Watch.org.
Photo of Brexit celebration on the Parliament Square in London, 31 January 2020, by Alexey Fedorenko from Adobe stock