SHOCKING: Why Labor needs to step up on Brexit or face dire consequences!

Good afternoon. It has been simmering in my mind for a while, but I think this week it has become clear that something really fundamental has changed in the Brexit debate.

Not long ago, any suggestion that Brexit didn’t work it was met with a barrage of defensive criticism and selective data from Brexiters seeking to demonstrate that leaving the EU was really just a failure in the minds of declining Remainers.

But not anymore. Even Brexiters don’t try to pretend it’s going well. They see public opinion shifting towards that view, but argue that the problem is that Brexit has been implemented with insufficient zeal. But implicitly they are accepting that Brexit is currently costing the UK. In short, it is no longer controversial to say that Brexit is harmful, at least economically.

It’s a change that has also somewhat freed the BBC, to the point where it recently ran a story about the UK car industry being crushed on rules of origin in the Trade and Cooperation Agreement (TCA) as the main point of the Ten O ‘Clock News.

And accompanying Rishi Sunak to Washington this week, BBC political editor Chris Mason didn’t hesitate to challenge the prime minister on how the UK will find a new place in the world as a mid-sized power, sandwiched between the US and EUROPEAN UNION. That Sunak was so uncomfortable told his story.

The result is that a new discussion space is being created. The end of the hyper-chaotic post-Brexit governments of May, Johnson and Truss and the looming future possibility of a Labor government mean we can now talk about policy options, not just the Westminster clown show.

This creates opportunities to explore ideas on how Brexit can be improved. Last week the UK Trade and Business Committee, co-chaired by Hilary Benn, a Labor MP and former cabinet minister, published a weighty report setting out 114 ideas to mitigate the impacts of Brexit.

The proposals were detailed and ambitious, covering everything from cars to chemicals, mobility and job qualifications and calling for much deeper regulatory alignment with the EU alongside a new Board of Trade to act as an independent observer for the UK’s trade policy United.

The Commission’s findings were primarily driven by the needs of businesses which, as we emerge from Johnson’s “fuck business” era, are starting to find their voice back, more confidently pushing for common sense solutions to the TCA.

The following week (June 20) many of these companies will gather in Birmingham for the “Trade Unlocked” conference (register here) which will be attended by high-level politicians and many business leaders and organizations who now see an opportunity to drive change.

The discussion is also underway in Brussels, although at diplomatic and Commission level it is clear from the talks with diplomats that the United Kingdom remains at the bottom of everyone’s agenda. This is a structural fact of life from being ‘out of the room’ and having ‘third country status’. It won’t rise to the agenda without some serious effort.

Again, next Monday the EU-UK Forum holds its annual conference on the theme of “A new relationship” after the Windsor painting. Foreign Secretary James Cleverly and his Labor shadow David Lammy are both expected to speak.

Work and Brexit

All this drum of activity begs the question: ‘where is Labor in all this?’ This question, I suspect, will be asked with increasing urgency. Because right now Keir Starmer and Rachel Reeves are still seeking shelter.

The FT aired this week a series to read about what a Starmer administration might look like, which is full of details on industrial and climate policies, but still conspicuously silent on Brexit, which is itself a key economic issue.

Starmer’s team tell my colleague Jim Pickard that the first 100 days of a Labor government would be about ‘economy, economy, economy’, with a ‘green prosperity plan’ at its heart, but Brexit is just the same red lines and generality.

I’m not sure how long Labor’s silence will remain tenable as the drumbeat of serious people proposing serious ideas about the UK’s future relationship with the EU grows louder.

It was remarkable last weekend that Gary Smith, the general secretary of the GMB union, which is one of Labour’s biggest funders, he complained to the Observer on the “fear of politicians to face the impact that Brexit is having” on the economy.

He called for a new discussion starting “from a position of honesty” because, as he said, Brexit is costing people. “It’s affecting commerce. It is affecting investment and we need a new deal,” she said.

A new discussion

And that, of course, is the obvious way for Labor to frame a new discussion. Not to scare right-wing Tory cries of treachery, but to dare to reframe the Brexit debate around jobs, investment and how Labor will deliver better results for workers.

Some commentators believe this is the plan, right after the election, but I’m not sure it’s wise (or democratic) not to socialize the electorate with the ideas behind those plans before proceeding to implement them when in office.

By taking a stealthy approach to resolving Brexit, Labor risks handing ammunition to those who will try to build narratives of treason around the ‘general policy’ of alignment which, as the Benn report notes, is needed to cut costs.

The second, equally important issue concerns honesty. Starmer promises to “fix” Brexit but, to the private frustration of industry leaders, has to no avail set red lines on the single market and a customs union that severely limit possible solutions.

The political dishonesty identified by the GMB’s Smith risks creating a mismatch between the expectations generated by documents such as the Benn report and what is achievable once Brussels applies the “third country” filter to the UK’s demands.

Any attempt to deepen the ties will result in a tough and iterative negotiation and, as we are already seeing on the rules of origin of electric vehicles, the clearing of the euro and joining the Horizon research programme, there will be no free passes from the Commission European.

The real danger is that when unrealistic expectations collide with reality and internal opposition from the right of the Conservative Party and the press, in reality Starmer’s first term will achieve very little when it comes to Brexit, with all the commensurate economic costs. and the investment that this entails.

Without honesty at home and without a serious rethink on how to interact with Brussels and EU capitals, the risk is another five years of stagnation that the UK cannot afford. Diplomatic and trade relations are half-lived and rapidly expiring.

It is not yet too late for Labor to get bolder. I respectfully disagree with my colleague Janan Ganesh when he argues (elegantly as ever) that tackling Brexit it should be a second term issue for Labour.

It is not only that, as he acknowledges, “waiting is not free”, it is that without serious steps to re-engage economically and diplomatically now, there will be no basis on which to advance towards the “bow to the inevitable” that Janan proposes a second Labor term.

There are real challenges ahead for Starmer. I fear they will not be welcomed by Labor who stick their heads in the sand on Brexit.

Brexit in numbers

The idea for this week’s article came after I started thinking about the impact of the government’s plans introduce border controls on goods coming from the EU to the UK from October, with physical border checks from January.

The introduction of the so-called “Target Operating Model” it also coincides with the start of new labeling and other requirements on goods and parcels moving from Britain to Northern Ireland as part of the Windsor Framework Agreement to set out the post-Brexit trade regime for the region.

The UK government is now consulting on the TOM, but I hear growing voices of concern from business – one example is the Horticultural Trades Association’s concerns about which border controls it will mean for the vegetable industry.

Even more worrying, say the food industry, are the effects on EU meat, dairy and other food exports to the UK. From October these will require export health certificates and other documents of the kind that UK exporters have struggled with since the TCA came into effect in January 2021.

The fear is that small producers in the EU (just like the UK manufacturers in 2021) will simply not bother with the paperwork and give up sending goods to the UK, which risks confusing supply chains in the run-up to Christmas and putting further pressure on food prices.

Given that over a quarter of the food consumed in the UK comes from the EU (see above), an ‘October crisis’ on food availability creates another potential political sticking point in the Brexit debate as we approach an election year.

As one head of a trade association told me, it strikes me as odd that the same government that is contemplating price controls on food is also “willing to impose the biggest inflation-regulatory move in 50 years.”

Is that an exaggeration? The government believes so, but has often ignored traders’ warnings at its own peril. One to watch.

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