This past year has been one of the most turbulent in terms of British politics in the modern era. The nation has gone through three different prime ministers, experienced the passing of its queen, who had served as head of state the longest, and is currently in the throes of a cost-of-living crisis that threatens to overwhelm the middle classes who vote for the Conservative party.
Rishi Sunak, the man who took control of the government and became Prime Minister, spent the first few weeks in office attempting to bring calm to a turbulent situation. His most recent predecessor, Liz Truss, had precipitated an almost unprecedented financial crisis with a reckless budget and was forced to resign after just six weeks; the previous occupant of 10 Downing Street, Boris Johnson, spent the final months of his premiership tarnishing the institution as he battled a series of damaging scandals. His most recent predecessor, Liz Truss, precipitated an almost unprecedented financial crisis with a reckless budget and was forced to resign after just six weeks.
Before the next general election, which must take place no later than January 2025, Sunak’s pitch has been one of calm governance and sound economic policy. He hopes that this will help narrow the huge polling gap between his party and the opposition Labour Party. The next general election must take place before this deadline.
But despite all of the destruction that took place in 2022, one of the most significant parts of Britain’s new political reality has received surprisingly little attention.
On January 1, 2021, the United Kingdom made the transition from a nation that was virtually a member of the European Union (EU) in all but name, to a distinct entity connected to the bloc by a narrow trade arrangement. This marked the beginning of the full implementation of Brexit.
The harsh divorce that occurred has already had an effect on the economy of the United Kingdom.
“The unfortunate truth is that we have erected additional obstacles on the supply side for British companies that have business interests in the European market. Therefore, those expenses have escalated for those businesses that continue to deal with the EU, while some smaller businesses have just ceased working with the EU at all because it is too cumbersome and expensive, according to Sam Lowe, a partner at the consulting agency Flint Global.
Since the full implementation of the Brexit deal, which is formally known as the Trade and Cooperation Agreement, there has been a decrease in both exports of goods and services to the EU as well as imports of goods and services from the EU, as confirmed earlier this year by the Office for Budget Responsibility (TCA). The Office of Budget Responsibility came to the conclusion that “there is little in the facts” to suggest that the assumption of a 15% decline in trade was wrong once the Brexit deal was put into effect.
In spite of how abstract this may sound, the real-world impact has been that British exporters have missed the small windows to get their goods into the EU, which has resulted in vegetables being left to rot and fish being tossed back into the sea. From the point of view of imports, Brexit has made certain foods more expensive, which has contributed to the worsening of the situation regarding the expense of living.
Brexit’s repercussions are not only economic. The United Kingdom and the European Union are not yet on the same page on the Northern Ireland Protocol, which is an essential part of the Brexit deal that was reached in 2019.
The United Kingdom has not completely implemented the protocol for a variety of reasons, which has resulted in the collapse of the power-sharing agreement between the Unionist Party and the Republican Party. As a result, Northern Ireland has been without a functional devolved government since February. These tensions place the principality of Northern Ireland in a hazardous and potentially dangerous situation, which is not surprising in light of recent events in that region.
Under more typical conditions, both the government and the opposition parties would be rushing to find a solution to the problem that is causing such severe economic and social damage. Despite this, Brexit has not returned to anything resembling a normal state six years after Britons decided to leave the EU.
Both of the big parties continue to believe that it is to their advantage to avoid discussing the specifics of Brexit. Raoul Ruparel, a former special adviser to the British government and a leading expert on Brexit, says that the Conservative Party does not see any benefit in engaging in debates that highlight what isn’t working in a deal that they negotiated and voted for. “The Conservative Party does not see any benefit in getting into debates that highlight what isn’t working in a deal they negotiated and voted for.”
“As for Labour, they are very unlikely to be successful in winning a general election if people believe that they have a covert interest in rejoining the EU. Any strategy that gives the impression of being lenient toward Brexit will leave them vulnerable to criticism, he warns.
Keir Starmer, the leader of the Labour Party, has proposed a five-point strategy to ensure the success of Brexit. The plan, on the other hand, makes it very plain that the Labour Party has no intention of rejoining the EU or any of its satellite institutions.
Despite the fact that this makes a lot of Labour Party members angry, allegations of Europhilia and covert schemes to undo Brexit have the potential to undo all of the hard work that Keir Starmer has put in to get the party closer to power than at any point in the recent past. One of the most important aspects of Johnson’s landslide victory in 2019 was the fact that historically, Labour voters who supported Brexit backed the Conservatives in areas that were previously held by Labour. To put it more clearly, Starmer needs those votes in order to win.
When it comes to preparing for the next election, this is the dilemma that the most prominent figures in British politics are up against. There are some aspects of Brexit that may be improved, and there is room for negotiation and compromise with Brussels. However, nobody wants to start a fire on the most volatile political subject in recent history for fear that it will blow up in their faces if they do.
According to the critics, the result of such inertia is a nation that does not have a clear sense of purpose or direction for the long term.
Ruparel claims that the country does not yet have a plan for where it wants to go after Brexit and that this is a problem.
Where do you see growth occurring in the future? Will we maintain our strong ties to the markets in Europe, or will we make a concerted effort to expand our reach into other parts of the world? What are the benefits of working with us? Given that we are unable to compete with the United States and China on a large scale in terms of manufacturing, should we instead position ourselves as a hub for high-end research and innovation? Everything about this seems up in the air right now.
Even if the political establishment in Britain were to have a sudden change of heart over Brexit, some analysts believe that it is too late for anything major to be done to alleviate the negative effects that Brexit will have in the long run.
According to Vicky Pryce, a former joint head of the UK’s Government Economic Service, “It’s the UK that’s dragged its feet on implementing the full Brexit deal because we know that the logistical difficulties caused by the new paperwork and checks make life harder for British consumers and businesses.” “We know that the new paperwork and checks make life harder for British consumers and businesses.”
“This is perfect for the EU since it allows them to criticize the United Kingdom for not doing their share while also demonstrating clearly who holds the upper hand in any potential future negotiations.” She goes on to say that this is harming the UK more than it is hurting the EU.
It is also not obvious what exactly those negotiations could be about at this point.
According to Anand Menon, director of the think tank known as the UK in a Changing Europe, the opportunity for revisions in the trade deal between the UK and the EU is very limited. “They would be required to agree to new arrangements in certain areas, which would imply additional talks and compromises with Brussels,” which “no politician in the UK is going to touch with a ten-foot pole.”
An independent United Kingdom would be able to strike new trade deals and, freed from the rules and regulations of the European Union, it would be able to make its economy more global and competitive, which was one of the central claims that supporters of Brexit made in the run-up to the vote in 2016.
The United Kingdom has recently established new economic relationships, the most notable of which is with Australia. However, even the analyses conducted by the government themselves estimate that it will have a very small influence on GDP.
On the other hand, the United Kingdom’s Office for Budget Responsibility, which is responsible for developing economic projections for the government, believes that the United Kingdom’s output will decrease by 4% over the course of the next 15 years as a direct result of leaving the bloc. It is anticipated that both exports and imports will be around 15% lower in the long run.
Truss made an effort to alter the supply side of the economy by lowering taxes for firms. Sunak is attempting to accomplish this goal by removing regulations imposed on banks and the services sector in the UK. Johnson’s ambitious plan called for him to make significant investments in areas of the UK that have lagged behind in terms of economic development in order to stimulate new business.
As Lowe points out, the issue with reforming your way to competitiveness is that “every other country is attempting to do precisely the same thing.” This makes it difficult to differentiate oneself from the competition.
In spite of Boris Johnson’s commitment to “get Brexit done” before the 2019 election, the withdrawal of the United Kingdom from the European Union (EU) continues to play a big part in the politics of the country.
Even though it didn’t take centre stage in this year’s political drama, it’s always there, like an unsolved plotline that’s rumbling away in the background.
Because Brexit is a slow-burning issue, it is doubtful that the United Kingdom will suddenly plummet over a cliff as a direct result of its repercussions. However, as time goes on, the negative aspects of Brexit are having a greater impact on a larger number of people and with greater consistency.
The issue that Mr. Sunak and Mr. Starmer need to ask themselves is whether or not it is worth the risk to ignore Brexit and its implications until after the next election. Because there is a possibility that in the two years that remain before an election, things will all of a sudden become a great deal worse.
And if that occurs, the general public may be left wondering why the most prominent leaders in their country continue to bury their heads in the sand when it comes to what is undoubtedly the most significant problem their country is experiencing right now.