The cliché goes that “time is running out” to make something of Brexit. But on Thursday Feb 9, the last speck of sand in the hourglass finally fell. It really is all over. And how fitting that Brexit was finally condemned to death in the gilded splendour of Ditchley Park – a discreet yet decadent retreat for this country’s most powerful since the reign of Elizabeth I. Of course, the status-quo order is trying to be subtle, even polite, about its magnificent triumph over Leaver populism. Last week’s gathering – which saw executives of major banks commune with senior political figures on both sides of the Brexit debate, including Michael Gove and David Lammy – wasn’t particularly secret, despite some attempts to hype it up as so. It also took place under a fairly bland working title: “How can we make Brexit work better with our neighbours in Europe?”
But let’s not be naive. The exchange dwelled heavily on the fact that “Brexit is not delivering”, and there was broad support for a closer relationship with the EU. In other words, both sides agreed that the dream of meaningful divergence had fallen into a deep coma. A proverbial contract to switch off the project’s life-support machine was subsequently signed. Not that Brexit’s demise was all part of some elaborate plot; the project has been mortally wounded for some time, and there simply wasn’t the political will to save it. We could dwell at length on who exactly killed Brexit. But in truth, as on Agatha Christie’s Orient Express, everybody wielded the knife. It was Theresa May who squandered her parliamentary majority and thus gravely weakened Britain’s negotiating position against Brussels. It was the political class who could never see the project as more than a damage limitation exercise. And it was the Brexiteers who failed to muster a compellingly modern vision – preferring to glory in buccaneering fantasies of free trade than focus on regulatory divergence to jump-start science and tech.
Regardless, the fact remains that Brexit is dead. The only thing left to do is the political equivalent of disposing of the body. This may start with furtive steps nobody can contest: reviving the Erasmus exchange program and co-operating with Brussels in new areas like energy. Meanwhile, Parliament will likely drop works in progress, such as the Bill to take thousands of Brussels laws off the statute books by 2023. Then, under pressure from big business, the Government might well seek to relieve labour market shortages by, for example, expanding the agricultural workers scheme. It may even introduce primary legislation to automatically update UK standards in line with EU changes.
Put bluntly, even before there is another referendum, we will most probably reach a point which feels a lot like being back in the Single Market. And ultimately, as support for Brexit plummets, we can expect a fresh vote within five to seven years. But here’s the hitch. There is no way that the ruling class can get away with terminating Brexit without seismic consequences. For one thing, it is highly unlikely that the Tories would be able to survive.
In order for the country to heal, the Conservative Party would have to be permanently destroyed through the ballot box. Fair or not, this is merely the way of history and the logic of populism. In a cleansing, cathartic act, the masses must find a way to acknowledge the revolution’s betrayals and perversions, while keeping the purity of the people’s will intact. The second explosive effect of Brexit’s death is that it has put the ruling class back on a collision course with the masses. People voted to Leave for two reasons. The first was to exercise control over who comes into the country. The second was out of frustration that the economic status quo is failing, to the point where millions were willing to take a massive gamble on Schumpeterian disruption.
Therein lies the nub of the problem with returning to business as usual. Such a bid would run roughshod over popular appetite for greater sovereignty and radical change. And it wouldn’t even solve the country’s economic problems. Remainers may think that reversing Brexit will stir the economy out of the doldrums. It won’t. Even before we left the EU, signs of the economic crisis were all around, from stagnant wages and corporate addiction to cheap labour and the worst productivity slump since the 19th century. The reality, so often missed, is that our current economic woes are not rooted in issues of trade or “business uncertainty”, but rather a profound global slowdown in technological innovation.
In response to this charge, the Whitehall orthodoxy can only babble about a “productivity puzzle” and “poor British management practices” as it clings to a defunct neoclassical economic approach that puts price competition, rather than innovation competition, at its heart. That is how deep the Brexit ditch has become – not only do our elites have no compelling plan for fixing things, they don’t even intellectually understand the core issues. The question now is what those who believe in growth should do. Brexiteers might be tempted to wallow in conspiratorial rage at the “deep state” who were “never going to let us leave”. But there is no time to mourn. The predicament of this country is too grave. Trussites have decided to focus on pressuring Sunak on tax cuts. But more urgent is a realistic growth plan that can be effective even in spite of high taxes and irksome EU regulation. This will be difficult, yet not impossible. After all, although serious taxes were levied during the Industrial Revolution, this actually incentivised entrepreneurs to cut costs by innovating with new steam-powered machinery.
A good start would be a growth coalition across all (surviving) major parties that can lobby to overhaul net zero and the planning system, and ensure that a DARPA-style innovation agency in the pipeline gets the cash and autonomy it needs to thrive. If this doesn’t happen, one dreads to think what comes next. We will no doubt sink deeper into decline. And we may also face a second populist wave far more extreme than the first.