How Brexit Shanked Britain

Written By: - Date published: 8:05 am, October 17th, 2022 - 23 comments
Categories: Brexit, economy, Europe, Free Trade, trade, uk politics, uncategorized - Tags:

The political and economic disasters now unfolding in Britain are the responsibility of the Conservative Party from their 2016 Brexit vote through to now.

Let’s start by going deep  into how the Conservative Party tilted the entire 2016 voting field.

In mid 2013 Prime Minister Cameron needed a mechanism to appease the very anti-regulation radicals in his party, and so he promised them a national vote that would put the question of whether to leave the EU or not. The entire political disaster had its origin in an internal party argument.

The EU referendum franchise excluded sixteen-and seventeen year olds, expatriate British citizens living abroad for specific years, and EU citizens resident in the UK and paying taxes in the UK. All three of course had a major material interest in the outcome of the vote.

The Scottish independence referendum of 2014 allowed sixteen-and seventeen year olds to vote, as well as EU citizens resident in Scotland.

The EU referendum had no threshold specified for the outcome. The 1979 Scottish devolution referendum required 40% of the entire electorate to be in favour. Briefing Paper 0712 of 3 June 2015 for the EU referendum stated that the EU referendum was advisory only and not binding on Parliament. This was confirmed in person to Parliament by the Minister for Europe in the House of Commons later in June 2015.

37% of this restricted electorate voted to leave the EU. By any standard this is insufficient to justify such a significant constitutional change to the UK. To change to MMP in New Zealand, 55% of the entire electorate took part and 70% favoured MMP. No civilised state in the world would make a major constitutional change without 60% or 66% of the vote or of the entire electorate.

The Brexit ministry then sought to trigger Article 50 of the Lisbon Treaty without a parliamentary debate. It had to be taken to court to oblige it to respect the constitutional sovereignty of Parliament.

The 2016 EU referendum was not necessitated by any crisis in the EU or in the UK’s relations to EU partners. It was whipped up by Europsceptics rebelling against EU-wide regulations on the right of the Conservative Party and UKIP.

It was not until months after the 2016 referendum, months after the Supreme Court case, and after the Parliamentary debate on Article 50 in the House of Commons, that a White Paper was published about what would actually happen if they left the EU. Here is the EU analysis of the legal destruction it caused.

So the referendum was gerrymandered, the result of an internal Conservative Party squabble, and was pushed by total contempt by the Brexit Minister for Parliament and the Prime Minister. It was less a democratic process than an engineered coup.

And now to where we are.

The new EU-UK agreement was signed on 24 December 2020. Within three months Prime Minister Johnson was seeking to renegotiate a major part of it in the trading rules for Northern Ireland, an approach quickly shut down by the EU.

After the UK’s departure from the bloc in late January 2020, GDP fell by 0.4% in February. Then COVID struck a month later. It did not show any growth again until November 2021.

The UK based Office for Budget Responsibility (OBR) stated that the long term impact of Brexit will be worse for the UK economy than COVID. They estimate Brexit will reduce the UK’s potential GDP by 4% and the pandemic a further 2%.

Exports to the EU sank by 45% by January 2021.

UK foreign direct investment fell by 17% from 2016 to 2021.

That is at least as bad as if the Australia-New Zealand CER agreement of 1983 and 2013 was unwound.

The previous UK Foreign Secretary Liz Truss, now currently the Prime Minister, said she was prepared to trigger Article 16 if a Northern Ireland deal could not be struck. This would suspend parts of the 2020 agreement and the EU has warned of political turmoil that would further seriously damage trade with the UK.

By October this year, Scotland is now within margin of error for wanting independence from the UK.

Since the 2016 referendum the Pound has fluctuated about 10% below its pre-vote value. This has left UK households poorer by increasing the cost of imports, resulting in higher inflation and lower real wage growth.

Trade deals intended to substitute for EU membership simply have no chance of doing so given the market size and proximity of Europe. The United States deal hasn’t emerged, and it’s the only one that could make a difference.

From where they were in 2016, the UK Pound was one of the leading currencies in the world. Now, current and former officials in continental Europe are barely concealing their Schadenfreude over Prime Minister Truss £45bn of tax cuts mostly for high-earners by increasing debt. She’s reversed that and fired her Treasurer.

The Financial Times has had useful commentary on the impact of Brexit and its recent politics recently.

 Since Brexit, the UK has shown a lot of hubris and denying reality, as if it was going back to greatness and the days of the empire,” said Vítor Constâncio, a former vice-president of the European Central Bank. “It’s delusional and underlines the cautionary tale that Brexit has represented, which is that going away from the European centre has been bad for the UK. “The pound is no longer an internationally meaningful currency — it’s amazing.”

The UK economy is now in trouble, with strikes, possible winter blackouts, declining economy, political chaos affecting markets, and a low quality government that will continue to 2025.

As hard right governments continue to emerge in Europe, the UK is the lesson in failure to watch.

Neither Europe nor the rest of the world needed a wilfully weakened United Kingdom right now, but it is wilfully weakened by the isolationist, anti-regulation, anti-solidarity politicians of the Conservative hard right.

23 comments on “How Brexit Shanked Britain ”

  1. Stuart Munro 1

    I cannot help but feel that Arron Banks, the funder of Nigel Farage, and whoever was paying him, was much to blame.

  2. mikesh 2

    Change is often painful. I would hope that in time the UK recovers.

  3. RedLogix 3

    Excellent post Ad. Your articles remain one of the principle reasons to read this site.

    The EU was never perfect and the UK should have demanded it continue to evolve and adapt. Events have proven that spitting the dummy was deeply irresponsible.

    • Craig H 3.2

      Particularly since the UK officials were heavily involved in a lot of drafting and policy work, so were as influential as they were likely to be, certainly more influential than from outside.

  4. Tiger Mountain 4

    Brexit was a disaster alright in so many ways.

    Jeremy Corbyn could have done much better and just have said “we will respect the peoples vote on Brexit–and–implement our re-nationalisation pro working class programme.

    Oh well, there’s always mushy peas, fry oops, jellied eels, and curry takeouts to cheer the poms up.

  5. Andy 5

    The current energy crisis has got nothing to do with Brexit and everything to do with Net Zero and dependence on wind and Russian gas

  6. Maurice 6

    The UK never fully integrated with the EU as it kept the Pound and a separate money system. If it had been dependent upon the Euro then Brexit would have been almost impossible. One begins to think that the UK had really never been serious about remaining part of the European Union and left at the first chance – how ever detrimental that may be.

  7. mikesh 7

    I'm told that Ted Heath was so desperate to get into the EEC in the early seventies that he agreed to what was essentially a very poor deal. I suspect that Britain wasn't doing particularly well before exiting.

    Was there a referendum held on entering?

    • Ad 7.1

      5 June 1975

      • Andy 7.1.1

        Yes, correct there was a referendum on entering the EEC, which at the time was merely a trade bloc.

        Political integration was always the plan but this was hidden from the unsuspecting public, as detailed in the book The Great Deception by Booker and North

        • DS 7.1.1.1

          It wasn't a referendum on entering. Ted Heath had already done that by Act of Parliament.

          It was a referendum on staying, because Harold Wilson's 1974 Government was divided between Leaving and Staying.

          • mikesh 7.1.1.1.1

            I heard somewhere that even Margaret Thatcher, though she favoured membership initially, wanted to leave in the end, and that that was why she was dumped.

  8. Jackel 8

    Well, they could start by producing more things the world actually wants. I'm certainly no tory, but I know enough about conservative economics to know that what businesses need are opportunities and a government that helps create them not peripheral things like tax cuts.

    She's gone with half trickle down Hunt. There is still a lot of extra spending and tax cuts they haven't walked back yet. The markets seem OK with this so far. But there is still some repricing to go yet. A good time for John Key types to bet against the pound and make some good coin I'd say.

    Some pissed off UK voters too seeing their living standards fall because of some dumbarse neoliberal tories. Curious lot.

  9. Obtrectator 9

    This truly was a coup, one where the legal forms were (mostly) observed but their spirit was stretched right to the breaking point. An advisory-only referendum was immediately treated by the hard-right as a ringing endorsement that they were entitled to take irrevocable action on at once. A textbook example of how a small, tightly-knit group with an extremely narrow set of objectives – or even one single objective – who know exactly what they want and how to get it, is able to overcome a well-intentioned but unfocused opposition.

    I'm far from certain the perpetrators were even particularly wedded to Brexit as a philosophy, any more than the Russian Bolsheviks of 1917 truly gave a tuppenny damn about the workers. It was simply a convenient train to hitch their wagon to, that wagon being to bring about a state of affairs in which they and their cronies could prosper to the max, at the expense of the general population.

    Of course Banks, Cummings and co didn't use armed force to cement their position, although they and their allies in Parliament and among law enforcement are coming mighty bloody close to it, with recent legislation that makes almost any form of effective protest an illegal (and/or very expensive) act.

    Nor do I believe BoJo was among the primary villains, though he does seem to have been happy enough to go along with it all. He was simply the necessary distraction – much as Trump was in the USA – taking all the attention away from the real bastards skulking in the background and quietly getting on with their business. If he hadn't been quite so undisciplined the puppet-masters would have been well content to leave him in place entertaining the gullible public. As it is, they're suddenly left without a charismatic front-person, and their naked greed is plainly on show.

    • tc 9.1

      Blojo is a primary villain by being the front and actively peddling the BS with that bus tour of deception during the Brexit vote.

      Then he undermined may until he finally got the PM gig. Boris is as culpable as any of the dark lord's imo.

    • Andy 9.2

      I suppose the idea that the British public voted for sovereignty over their own country is an idea not even worth entertaining? The idea that the wealthy european countries of Norway and Switzerland can exist quite well outside the EU is not of consideration?

      • joe90 9.2.1

        The idea that the wealthy european countries of Norway and Switzerland can exist quite well outside the EU is not of consideration?

        Seem the wealthy European countries of Norway and Switzerland exist quite well outside the EU by agreeing to the Ts&Cs.

        Summary

        While the UK’s strategy toward access of the EU single market after Brexit is unclear, the experience of the four non-EU countries having access to it suggests that the conditions of access may involve:

        • Sizeable net financial contribution to the EU budget (Norway pays similar amounts to current UK payments in relative terms, though Switzerland and Liechtenstein pay surprisingly small amounts.);
        • Sizeable net inflow of EU workers and their families (relative to population, all four non-EU countries received about twice as many EU immigrants as the UK);
        • The adoption of a very large share of EU regulations – without a voice in influencing them.

        None of these elements may look attractive to those who campaigned for Brexit.

        https://blogs.lse.ac.uk/brexit/2016/07/20/how-much-do-non-eu-countries-give-up-for-access-to-the-single-market-more-than-brexiteers-will-like/

        • Andy 9.2.1.1

          Thanks I am aware of the conditions that Norway and Switzerland operate under. Many of the leavers wanted an interim EEA type of arrangement but were disappointed in the deal that Boris ended up with.

  10. Mike the Lefty 10

    Did anyone see the TV1 programme about Boris Johnson last Sunday evening?

    If so, what did you think?

    (I didn't see it all, couldn't stay awake – went to bed).

  11. DS 11

    Here's the funny thing: yes, Britain is in a mess. But it is in a mess because the Tories are incompetent. The public can vote them out at the next election.

    You can't vote out the European Commission. Indeed, the EU – so beloved of so many here – would have actually made renationalisation of rail impossible. Basically because the EU is at its heart, a neoliberal corporatist entity – which in turn is why traditionally Euroscepticism was the domain of Labour and not the Tories.

    The EU referendum franchise excluded sixteen-and seventeen year olds, expatriate British citizens living abroad for specific years, and EU citizens resident in the UK and paying taxes in the UK. All three of course had a major material interest in the outcome of the vote.

    And none of those can vote in normal British elections.

    The Scottish independence referendum of 2014 allowed sixteen-and seventeen year olds to vote, as well as EU citizens resident in Scotland.

    Yes, because the SNP was trying to help the Yes vote.

    The EU referendum had no threshold specified for the outcome. The 1979 Scottish devolution referendum required 40% of the entire electorate to be in favour.

    Yes, because the unionists in the 1978 Labour Government insisted on a threshold. The SNP still complains about it.

    Briefing Paper 0712 of 3 June 2015 for the EU referendum stated that the EU referendum was advisory only and not binding on Parliament. This was confirmed in person to Parliament by the Minister for Europe in the House of Commons later in June 2015.

    It was politically binding, not legally binding. If the public votes for something, that vote ought to be respected.

    37% of this restricted electorate voted to leave the EU. By any standard this is insufficient to justify such a significant constitutional change to the UK. To change to MMP in New Zealand, 55% of the entire electorate took part and 70% favoured MMP. No civilised state in the world would make a major constitutional change without 60% or 66% of the vote or of the entire electorate.

    The 2016 Brexit Referendum (72%) was Britain's highest turnout in any vote since 1992. Of those, Brexit got 52%. Is that 37% of the total electorate? Yes. But it is more of a democratic mandate as any British Government has had since the Second World War. UK Labour's 1945 landslide was built on getting 48% in a 72% turnout. Tony Blair in 1997 got 31% of the electorate.

    The MMP referendum in 1993 was actually 53% of 82%. So 44% of the New Zealand electorate voted for it.

    That's the funny thing. You literally can't have any constitutional change if you insist on having that sort of "civilised threshold."

    The Brexit ministry then sought to trigger Article 50 of the Lisbon Treaty without a parliamentary debate. It had to be taken to court to oblige it to respect the constitutional sovereignty of Parliament.

    Yes, Parliament is sovereign. For the same reason the referendum was legally non-binding. But that is a reflection of Tory screw-ups, rather than any lack of legitimacy for Brexit.

    • mikesh 11.1

      Yes, Parliament is sovereign.

      I don't that it was a question of parliament being "sovereign". I think it was the fact that there were a large number of laws, relating to EU regulations, which had to be repealed in order to effect an egress; and to repeal them would have required the consent of parliament.

  12. mikesh 12

    It was politically binding, not legally binding. If the public votes for something, that vote ought to be respected.

    It probably wouldn't have been binding because there would be an expectation that it would depend on what sort of of deal could be negotiated with the EU.

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