In what looks certain to be an election year, things are looking bleak for the Conservative Party. I am tempted to say they’ll be extremely lucky to lose. Judging by recent interviews and social media posts, they intend to draw a veil over their own record and campaign on the basis that Labour could be even worse, which even in these strange times seems hard to believe.
Unlike the last time voters went to the polls nationally, Brexit is unlikely to figure prominently in the election literature of either side, but it will be the herd of elephants on the campaign trail. The reason can be seen in Peter Kellner’s analysis of the latest voting intentions in Prospect Magazine: Brexit hasn’t gone away. Just look at the polls.
Attracting the vast majority of leave voters four years ago allowed Boris Johnson to win a stunning victory. Unfortunately for Rishi Sunak, widespread disenchantment has now set in, and support from this quarter has all but collapsed, falling from 74% in 2019 to 40% today.
The Conservative problem can be seen in where those missing voters have gone. Reform has attracted half and most of the rest have peeled off to Labour or the LibDems. In short, Brexit – the Conservative’s flagship policy alongside austerity for the best part of a decade – has failed to satisfy either side and the result is a huge 23% swing to Labour among leave voters plus a smaller but still significant 7.5% swing among remainers.
It could be a watershed event, as Kellner remarks. The Conservatives “have failed to hold on to their surge in support from leave voters – and become increasingly toxic to pro-Europeans. The result has been to shrink their traditional, ideologically broad, electoral base and threaten their ability to win future elections”. Not entirely bad news then?
The realisation that the party is going to carry the can for Brexit can be seen in various articles in The Telegraph trying to prop up support in the absence of anything saleable as a tangible benefit. Lord Frost says: The EU isn’t about to collapse. It’s worse than that, while the economist Roger Bootle declares: No, Brexit was not a terrible mistake.
The very fact they see the need to pen this stuff will be taken as confirmation that it was a terrible mistake.
The Brexit border problem
Among a host of other issues, the phased introduction this year of border checks on imports threatens the UK’s food supply chain. In 2020, the government promised “the world’s most effective border” by 2025 and even published a roadmap towards delivering it. Since then we’ve had five delays and now the implementation of a Potemkin border, one that looks nice on paper but is really just a facade.
The FT report having seen internal government documents that confirm that border control posts (BCPs) could be overwhelmed in April because they “might not be ready to complete the required checks in time”. This is three years after the ‘sclerotic’ EU managed to implement the same official controls overnight on 1 January 2021.
If the BCPs are swamped, a process known as TODCOF or “timed out decision contingency feature” will apply to medium-risk animal products “on an interim basis” to indicate that “a documentary check had not been undertaken but the consignment was cleared for entry”.
It seems Britain could soon have the world’s most ineffective border. Ministers are clearly aware of the old adage that mankind is never more than nine meals away from anarchy.
This week we noted 12 downsides and added them to the dossier.
Environment
Since Brexit, the EU has added 31 chemicals to its watchlist of substances of very high concern compared to just four in the UK. Chloe Alexander, senior campaigner at the charity CHEM Trust, said the UK regulatory apparatus on chemicals is being left to “wither on the vine”, adding that “people and the environment in Britain will have greater exposure to harmful chemicals than in the EU and a second-rate system for regulating chemicals”.
The economy
A report by the think tank UK in a Changing Europe suggests that Brexit is at least in part responsible for the relatively low level of business investment in the UK, indicated by the particularly poor performance since 2016. Investment has been around 10% lower than it would otherwise have been: translating into a reduction in productivity, and hence output, of a little over 1% of GDP.
The Danish group Novo Nordisk, Europe’s most valuable public company in 2023 is to invest £2bn in a new manufacturing facility in Ireland which The Times claims is particularly attractive as an English-speaking country in the EU after Brexit. One anonymous CEO of an investment fund said having a great ecosystem and “just being part of the EU” makes a big difference, adding, “So you put those two things together and when people look at setting up a factory it’s very often, very high up on the list”.
As already mentioned, news that UK government’s contingency planning includes plans to bypass checks if BCPs are overwhelmed when physical checks on plant and animal products from the EU come into force in April this year has seen some eye-rolling in Britain’s supply chains.
A senior UK port industry executive said the plan was a recognition that applying full border checks designed for unaccompanied container freight to high-speed, ‘roll-on, roll-off’ ferry traffic was often impractical. The anonymous executive added that “It’s the continual battle to try and ‘fix’ the systems for a type of transit and location that prospered under a different border system”.
Financial services
The Telegraph reports that new rules introduced this week by Brussels forcing derivative traders in London to clear deals through the EU is “dealing the latest blow to the City”.
London could lose control of a significant share of the lucrative annual £626tn (to be clear, this is £trillions) clearing market, where City traders act as middlemen in international contracts to ensure deals are settled even when counterparties default. The new rules require banks and asset managers above a certain threshold to clear derivative contracts, such as euro interest rate swaps, through accounts with EU-based clearing houses.
It is part of an EU drive to take control of all Euro clearing by June 2025.
Government
We know that spending taxpayer’s money wisely is not a priority for Conservative ministers but two items in the news this week illustrate this government’s warped thinking.
After the UK was kicked out of the EU’s ultra-precise Galileo satellite navigation project, Dominic Cummings persuaded Johnson to take a £400mn share in the bankrupt satellite company OneWeb, to help develop a rival operator. OneWeb then merged with the French company Eutelsat in 2022.
The share is now worth £250mn and the French owners have acquired the intellectual property rights according to The Times. With £150mn down the drain, HM Treasury is trying to recoup money by cutting money for local councils who have lived on a starvation diet since 2010, while burdening them with additional work.
Dover District Council is the latest to warn it could be at risk of having to issue a section 114 notice – effectively declaring itself bankrupt after the government withdrew £3mn of funding leaving the council to finance the new EU import checks ministers have introduced this year.
Deputy leader Jamie Pout, said without adequate funding the council would “have to make serious decisions about port health services in this district”.
Transport
Eurostar may be forced to restrict passenger numbers further when biometric border controls come into force later in 2024 for non EU citizens or those outside the Schengen area who will need to register before entering the zone.
The owners and operator of the line and stations between London and the Channel tunnel has warned that planning for the new entry/exit system checks at the London rail station are “severely inadequate”, and would lead to long delays and potential capping of services and passenger numbers.
Food
The founder and CEO of Mercato Metropolitano, London’s first sustainable community food market, has written a letter published by the FT urging the UK government to “reconsider” the new food import checks which he claims will cause EU farmers and suppliers to think twice about exporting fresh food to the UK. Andrea Rasca said: “British consumers will lose out on a variety of produce, see an increase in prices and ultimately find it harder to access the healthy and nutritious food they need.”
Culture
Gus Unger-Hamilton, from the Mercury Prize winning band Alt-J, has told National World that the UK music industry is “going to shrivel and eventually die if this government doesn’t eventually give musicians a bit of help”.
A report by the Independent Society of Musicians has found that almost half of UK artists say they have had less work in Europe since Brexit, with more than a quarter getting no work at all.
Retail
The owner of a handmade jewellery business in Camden claims the costs of importing products from overseas has increased by 25% since Brexit. Laetitia Dupont, originally from Nice in France, opened her shop, Let’s Jam, just before Covid and told MyLondon she used to be “absolutely positive” that she would be a Londoner for the rest of her life but now, financial difficulties mean she might “not be able to survive here”.
Northern Ireland
Barely as week goes by without a downside on Northern Ireland. This week is no exception. A professor of political sociology at Queen’s University Belfast has accused the UK government of breaching the principle of “rigorous impartiality” contained in the 1998 Good Friday agreement. This is the obligation to be even-handed and to protect both nationalists and unionists in Northern Ireland from discrimination and neglect.
Professor Katy Hayward says efforts to restore devolved government in Northern Ireland have seen ministers abandon even the “pretence at impartiality” after Northern Ireland Minister Chris Heaton-Harris, told the DUP leader, Sir Jeffrey Donaldson in the House of Commons last June:
“I can bring forward legislation in this place that does exactly what he needs it to do for his party to be able to give me a date when it will go back into the Executive in Northern Ireland … as he knows, I constantly seek his guidance to ensure that I get this bit of my job completely right.”
It could have serious repercussions in the future.
