Brexit: Now It Gets Messy

Classes resumed this week in Cambridge, bringing the university back to life. So yesterday, I caught the quick train from London for the first of Lent term’s weekly fellows’ lunches in my College. The previous day’s news that inflation had begun rising hit home when I bought my ticket from the vending machine.

That was the same day Prime Minister Theresa May addressed ambassadors in Lancaster House and told them Britain was headed for a hard Brexit. After months of platitudes – Brexit means Brexit, we want a red-white-and-blue Brexit – Mrs. May finally spelled out her government’s plans for leaving the European Union. Britain, she said, will leave the single market and negotiate a free trade deal with Europe. If her European partners don’t go along, the country will just go it alone. No deal, she said, was better than a bad deal.

Britons currently approve of the way the Prime Minister is doing things. However, she may want to enjoy her favourability ratings while they last, because now the hard work begins. Brexiteers have successfully sold a narrative to the public which says that Britain is a dynamic country being held back by a sluggish, crisis-prone EU. Mrs. May pointed out in her speech that the UK’s economy grew faster last year than any other major Western country’s.

This may be as good as gets, though. The plunge in the value of the pound that followed the Brexit vote has finally begun to work its way into the shops, as I discovered at Kings Cross station yesterday. Forced to cut back as we tackle higher prices, British consumers will probably restrain consumption this year. Meanwhile, firm managers will likely hold off making major investment decisions until Britain’s future trading relationships become clear, something which will take years to resolve. The economy will slow.

Taken together, in the months ahead, it is expected that inflation rate will surpass the growth rate. Living-standards will thus decline for most Britons. Brexiteers, who like foreign minister Boris Johnson have been saying we can have our cake and eat it, will have to explain why the cake is crumbly.

They will no doubt point to the other side of the narrative, that the European Union is going through worse. But what if it doesn’t? What if this year’s elections in Germany and France stem the populist tide and temper the sense of crisis that overcame the EU last year. What if Europe’s growth rate beats Britain’s? Neither scenario is looking as unlikely as just a few months ago.

The government will still be able to say that the rest of the world is queuing up to do trade deals with Britain, and that we’ll get better agreements when we can bargain for ourselves. After all, the incoming US President, Donald Trump, has already said he’s keen to make a deal.

Bear in mind, though, that this is the same Donald Trump who told his compatriots he’ll tear up trade deals and drive tougher bargains. Britain may get an agreement with the US, but it may not be on generous terms. As a savvy deal-maker, Donald Trump may welcome Brexit precisely because he’d prefer to divide and conquer a fragmented Europe in its bargaining than to talk with the world’s largest economy.

Once Mrs. May formally triggers Article 50, which she’s said she’ll do before the end of March, we’ll move beyond visions and into cold facts. As we see what kind of arrangements the EU, and other trading partners, offer us, there are bound to be disappointments, if only because all that the Brexiteers have said so far is that everything will be great. But behind the headlines that show broad approval for the direction in which Mrs. May is taking the country lies a big catch: consistently, most Britons are saying they do not want their living standards to take a hit.

It’s now put-up-or-shut-up time, and the Brexiteers will have to start delivering, bit by bit. Yet if train fares, grocery baskets and energy bills keep rising; and worse, if the queues outside hospital emergency wards continue lengthening as they did over Christmas — after all, the government has other things to deal with than just Brexit — the mood in the home counties may start to sour.

Moreover, there was a sting in the tail of Mrs. May’s speech that may yet turn back to bite her. When she warned European governments not to bully Britain, because she would walk away from the table, she probably made more of last summer’s Brexit mandate than it justified. As I wrote then, of the 52% of Britons who voted to leave, perhaps only a minority intended a hard Brexit. No doubt mindful of that, Mrs. May agreed to put the final accord to parliament.

When asked what would happen if MPs’ rejected an eventual deal, Mrs. May said she expected parliament not to go against the will of the people. Fair enough. But suppose that, in two years’ time, support for Brexit has softened. If the will of the people were to noticeably change, what might parliament then do?

Yes, things could get messy.

Image: Bridge on the River Cam

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