By Jack Horrigan
At the signing of the Declaration of Independence, Benjamin Franklin remarked “We must all hang together, or, most assuredly, we shall all hang separately”. 250 years later, it was Britain’s turn to “declare independence” from the European Union (EU) – and a year into its withdrawal, it appears to be hanging alone.
2021 saw the culmination of Brexit. On 1 January, the U.K. finally completed its four-year-long withdrawal from the bloc. The divorce was sluggish – and more than a little acrimonious. Though technically the separation was completed 31 January 2020, the two parties agreed that not much would change until January 2021. Of course, only a year in, Brexit’s long-term effects are difficult to glean. But in the short-term, the past year has seen disastrous effects for the British economy – and the prime minister is reluctant to acknowledge it.
The issue of Europe has long been controversial in the United Kingdom. Since the inception of the EU’s predecessor, the European Economic Community (EEC), the United Kingdom has enjoyed a tumultuous relationship with its continental neighbors. For one, it was late to the party; the EEC was formed in 1957, yet Britain only joined in 1973 – well after the regulatory regime of the community was established. The bylaws of the community favored agricultural powers, while more industrial powers (like the U.K.) were left behind. Such an arrangement earned the ire of British politicians and publications alike. Margaret Thatcher, perhaps the mother of Euroscepticism, vociferously opposed further integration into the EU: her famous “No. No. No” speech on the floor of the House of Commons was an effective, if succinct, summary of her position.
This year has been the logical endpoint of Mrs. Thatcher’s – and her successors’ – goal. What started in earnest in 2016, with the referendum to leave the EU, has been accomplished this year. On the Brexiteers side, one has an auspicious promise: the U.K. is free at last to pursue its vital interests unburdened by a clunky, oppressive bloc. On the Remainers side, one has a gloomier picture: a kingdom alienated from its neighbors and irrevocably fractured itself. Which is it?
The truth lies somewhere in the middle. The U.K. has indeed turned into a more limber democracy following the referendum. It has been free to pursue treaties with the US and Australia. It offered aid (and a path to citizenship) to Hong Kongers. It has replicated the US’s pivot towards Asia by joining AUKUS, the new triumvirate of Australia, the U.K., and the US focused towards the Indo-Pacific. Prime Minister Boris Johnson’s aim is a superpowered Britain with a muscular foreign policy (also called “Global Britain”) and freedom from the unwieldy 27-member bloc is central to that vision.
But to project strength abroad, Britain must first have stability at home. Brexit has exacerbated COVID-19’s effects on the British economy. Deportations, a sense of unwelcome, or simply greater economic opportunity elsewhere has resulted in a mass exodus of at least 200,000 EU nationals from the U.K. In March, the Office for National Statistics reckoned that over a million people had left the country – which is not exactly the sort of “leave” vote Mr. Johnson was looking for.
This dearth of workers has arrested any potential economic growth – a problem made even more acute by the sectors affected. EU nationals made up thousands of Britain’s lorry drivers. In their absence, the U.K. now has an estimated 100,000 fewer drivers than it needs to accommodate consumer demand. This paucity has clogged the arteries of the country’s economy – shipping is integral to a large swathe of British industry. In September and October of 2021, that meant a petrol shortage – a problem exacerbated by the market’s expectation of scarcity. At the height of the petrol panic, Britons could expect hour-long queues simply to fill up their cars. The government has applied a rather weak tourniquet by offering temporary visas to 5,000 lorry drivers. European drivers were not keen on the offer.
It is hard to fault them. If there has been any winner from Brexit, it has been the EU. The bloc’s GDP grew twice as much as Britain’s, and nearly quadrupled America’s growth. Brexit – though a turbulent tale – is no longer very pressing for most EU countries. Indeed, the bloc may have even emerged from the ordeal stronger than before. Britain, rather than being a trend-setter, is now a cautionary tale. Since Britain’s referendum, Eurosceptics from Marine Le Pen of France to Matteo Salvini of Italy have tempered their vehement denunciations of the EU into much more diplomatic talk of “transforming” the bloc. Europe has emerged from this crisis even more interconnected.
The power they have gained has come at Britain’s expense. Once upon a time, London was the financial capital of the world; after the rise of America, it remained the financial capital of Europe; now, it appears, it may be nothing at all. London’s financial power has leaked to other European cities (most notably Amsterdam). The EU’s regulatory regime is shared among 27 countries; the U.K.’s only applies to one. What bank would choose the pariah? As a result of Britain’s white-collar jobs moving to the continent, and in light of the shortage of blue-collar workers, the government has attempted to usher more students into vocational training rather than traditional university. It is a far cry from the “high-skill, high-wage” economy Mr. Johnson promised in October.
But Brexit is not over: some disputes between the EU and the U.K. remain. Fishing rights between the two parties remain contentious. This debate has hurt the U.K. fishing industry tremendously, in part due to British boats being barred from the fertile Norwegian waters. One U.K. fishing organization, U.K. Fisheries, lost 60% of its business due to the dispute.
By itself, this is a grim but acceptable reality. But its effects on the British union itself are even grimmer. Despite England having well over 10 times the population of Scotland, they have approximately the same number of fishers – meaning that fishing is comparatively a much larger industry for England’s northern neighbours. Already, Brexit loosened the ties between the two countries. (One Scottish MEP implored the EU to “leave a light on, so [Scotland] can find its way home” following the referendum. He was met with applause). If Westminster is perceived to be protecting English interests at the expense of Scotland’s, the relationship may be stretched even further.
Scotland is not the only country in the union irked by Brexit, which was a mostly English referendum. In 2016, the Brexiteers – Mr. Johnson among them – weaponized nostalgia. They invoked the days when Britain was a superpower to win votes. But by attempting to resurrect the glory of Britain’s past, they have awoken the shameful parts as well. Brexit has picked at the scab known as the Good Friday Agreement – and Northern Ireland is bleeding once again. Both the U.K. and the EU were careful to avoid a hard border between the Republic of Ireland and Northern Ireland, which naturally resulted in a border between Northern Ireland and the rest of the U.K. Few are happy with this arrangement. The spring of 2021 was tinged red by violent rioting in Northern Ireland by unionists who felt abandoned by Westminster. Meanwhile, last year saw the pro-reunification party Sinn Féin (which has historic links to the IRA) win the most votes in the Republic of Ireland’s general election. Brexit has catalysed the unification movement. Both parties see the current trade regime as treacherous – on 30 December, the Irish foreign minister urged the stalwart Westminster to come back to the negotiating table.
Once upon a time, the European question divided conservatives. Geoffrey Howe, Mrs. Thatcher’s then-foreign secretary, resigned in protest following her performance, and Mrs. Thatcher herself was ousted only days later. Nowadays, one is hard-pressed to find anybody who seriously sees a case for rejoining. The Conservative party-line has been pro-Brexit for years; in April, even opposition leader Keir Starmer conceded there was “no case” for rejoining. Indeed, even as the withdrawal has battered the British economy over 2021, support for Brexit has dropped only 2% since January 2021. Mr. Johnson has been even more bullish. As petrol lines grew and workers fled, his government insisted nothing was amiss; as the sky was falling, his persistent message was simply, “don’t look up”. Whether the economic shortfalls are merely growing pains, or whether they augur more serious snags to come, Mr. Johnson has exited the year embattled, for myriad reasons. Brexit is not his only concern — ethical quandaries, mixed with a mishandling of the pandemic, has left him in an unenviable position. His allies are fleeing; his approval rating is plummeting – Mr. Johnson may soon be hanging alone, too.
The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.