As the turkeys that voted for Brexmas celebrate the oven being lit, it is a good time to look hard at what Chief Turkey Farmer and Head Chef Johnson has in mind for the stuffing.
Leaving the EU didn’t have to be the end of the world. The EU had a lot wrong with it. Fisheries for example, although the UK Government were more complicit in encouraging non-British trawlers into our waters than they would want to tell you. The expansion to poorer Eastern Europe countries was a fatal mistake, draining them of their best skills and opening their markets for exploitation, whilst topping up the bank accounts of sometimes corrupt, sometimes racist, often homophobic, more often incompetent Governments. However, it had a lot of good points too with the Single Market of undoubted economic benefit to the UK. A Norway solution would have enabled us to continue to benefit from the Single Market whilst being able to develop our own trade deals elsewhere, for what that’s worth. We might also have been able to put conditions on any financial contributions.
The turkeys are cock-a-hoop at what they think are the benefits of free trade deals with the rest of the world. How misinformed they are. Free trade works when the parties involved are roughly on a par in terms of economic and industrial development. It works best for net exporters of goods and commodities. But 80% of the UK economy is services. Manufacturing, food, mining including oil, gas and coal, and so on represent just 20% now and our labour costs in those sectors are comparatively high. Free trade in goods and commodities with less developed countries with much lower labour costs will inevitably destroy what little industry remains in the UK. Take a look at the automotive industries in New Zealand and Australia to see the future of our car factories. Conversely, free trade with developed, high labour cost economies in the EU based on common standards and rules, has been very beneficial to the UK over the years. We really don’t want or need free trade with China, India, and Brazil. We really do need access to the EU for our services sector. We have a major balance of payments surplus with the EU in services and, in their own economic interests, I have no doubt that the EU plans to restrict UK access in that area.
Trump is the result of ill-considered free trade that has destroyed a huge amount of US industrial production. Make no mistake, Trump’s trade wars are very popular domestically and may yet see him re-elected despite everything else.
So right now we have a belligerent Chief Turkey Farmer and Head Chef declaring that the UK will not be tied to any EU rules. When it comes to services though, they are the customer and the customer is always right or they go somewhere else. When it comes to our exports of goods again, they are the customers and set the rules. We can, or course, set our own rules when we are the buyers but we don’t exactly have the capacity to replace EU imports with domestic production. Either way we have a very weak hand when it comes to negotiation with a trading bloc seven times our size. It is utter madness.
I fear it is necessary for Brexiteers to dip their toes into the pain that will be life outside the EU/EEA. Nothing other than the reality of a decimated economy will change their minds. For some, trapped in a fantasy where the British Empire is still there, just waiting for us to rejoin, nothing at all will alter their view.
In the meantime, despite his rantings, Farage’s joy is likely to be relatively short-lived. Leavers are predominantly older and Remainers predominantly younger, 80% of the 18-24 group. To put it bluntly, Brexiteers are a dying breed. Remainers will, in time, have enough political clout to reverse Brexit. I give it 10 years unless the turkey farmers realise that the Norway/EEA route is actually the best compromise. I will be in Trafalgar Square celebrating Brentry. But the EU also need to learn some lessons to prevent other nations following the UK out. It needs reform of fisheries and agriculture, to focus on people first, and to stand up against the “democratic backsliding” in Poland and Hungary. It needs to recognise that free movement of people works only where the push/pull factors do not result in mass migrations of skilled and educated citizens, causing major problems at both ends – Romania and the UK for example. These problems need real solutions.