‘Fundamentally Meaningless’ – The Government’s Brexit Benefits Paper

‘Fundamentally Meaningless’The Government’s Brexit Benefits Paper

Chris Grey looks at the untruths, half truths and vague aspirations of the 102 page report on the benefits of leaving the EU, and discovers a ministerial power grab and a glaring failure to account for any of the costs

Amidst not much fanfare, perhaps unsurprisingly given so much attention was focussed on the Sue Gray report, on Monday the government published its report on ‘The Benefits of Brexit‘. Produced to coincide with the second anniversary of the UK leaving the EU, it outlines both what has been achieved so far and what the future holds, and weighs in at 102 pages. 

As such, a detailed evaluation would be a huge task, with different sections requiring sector-specific analysis. That will emerge in due course, but the general contours are clear enough. The claims made for Brexit benefits so far are a mish-mash of things that are untrue, or true but misleading or of trivial or questionable value. Meanwhile, the future plans are aspirational, often vague and frequently unrealistic.

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Untruths and Half-Truths

Most glaring of the untruths are things that have been done but which did not require Brexit. Examples include the deployment of the UK’s Carrier Strike Group in the Indo-Pacific and the establishment of the strategic partnership with Australia and the US (AUKUS), or re-affirming the UK commitment to work with the US via the new Atlantic Charter – to say nothing of the introduction of blue passports and crown marks on beer glasses.

Spending more money on the NHS is an especially egregious example of this type of untruth since it comes immediately after reference to no longer paying EU budget contributions. Though not quite re-stated, the old lie from the red bus persists, at least by implication.

Other cases are more complex. Expanding the Export Support Service for businesses is another thing which could have been done without Brexit but, because it is currently focussed on advising on exporting to Europe, its development would be better thought of as a cost of Brexit in that this focus reflects the new difficulties of doing trade with the EU.

Nor can the rollover of trade deals meaningfully be called a benefit of Brexit, even though the need to do so arose from Brexit since, with the main (and then only limited) exception of the deal with Japan, they simply reproduce what the UK had anyway. Including in the list a trade deal with the EU is especially absurd as it means worse terms of trade than existed before. It is beneficial only to the extent that it avoided the even worse outcome of having no trade deal at all.

Throughout the report, there are numerous examples that have a similar structure to this in being, effectively, damage limitation. At the major end of the spectrum is the commitment to digitise the border so as to end up with (of course) “the most effective border in the world” – but this is only necessary because, with Brexit, a huge clumsy new border with the UK’s main trading partner has been created. At the minor end of things is the quite laughable idea that holidaymakers once again having a duty free allowance when travelling to the EU is a benefit, given that it arises solely because they have lost the right to bring almost unlimited quantities of goods back for personal consumption.

Predictably, the new trade deals with Australia and New Zealand are cited as benefits, as well as possible agreements in the future. It is true that these are only possible because the UK is no longer in a customs union with the EU. What is misleading is the extent to which they can be seen as benefits, in that their estimated impact on GDP is very small, whilst their negative impact on UK farming, in particular, is likely to be quite large.

Another predictable boast is about the creation of Freeports, and here the situation is more complicated. It’s commonly objected that this isn’t a Brexit benefit because the UK could, and used to, have Freeports whilst an EU member. However, that objection doesn’t quite hit the mark because the government are right to say that the UK is now exempt from the specific EU rules about Freeports. The more accurate reason why it is misleading is, first, that escaping EU rules may not be especially desirable if, for example, it enables UK Freeports to be vehicles for money laundering and tax evasion. And, second, the case for Freeports is highly questionable, since generally they simply divert economic activity away from other areas with little or no overall benefit.

The claim about the UK now having an independent sanctions policy is also true whilst being somewhat misleading. For, as is currently on display in relation to Ukraine, ramping up really effective sanctions requires involving multiple countries. The UK on its own doesn’t have much leverage. So Britain is now seeking to persuade the EU to adopt its own approach, just as it would have done whilst a member but with much less influence.

It’s also true that Freedom of Movement has ended, but the implications of this are complex and contested. Many would say that it is not a benefit of Brexit at all. It certainly entails a loss of rights formerly held by all British citizens, and both lost rights and significant burdens for EU citizens in the UK and vice versa. It also means the loss of the personal, cultural and economic benefits the UK used to derive from EU citizens, with the most visible effect being the contribution to the current labour shortages.

Even so, to the extent that ending free movement was an important driver of the vote to leave it may be thought, by some, to be a benefit – except that the signs so far are that it will mean correspondingly more immigration from non-EU countries. Such leave voters may not think that this was what they had in mind.

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Isolated Regulation

Then there is a string of things in the report which are true but of fairly limited value – if any.

Examples include improved animal welfare standards (no doubt seen by some as a genuine gain), scrapping the ‘tampon tax’ (important, but probably due to happen in the EU anyway), a revised system of alcohol duties (of mixed benefit, according to some in the industry), the possible restoration of the right to sell goods using imperial units only (a cause celebre for some Brexiters, but fairly niche), reducing domestic air passenger duty (questionable in environmental terms), and the establishment of a UK-only Geographical Indicators (GI) scheme for regional produce (of very limited value, precisely because it applies within the UK only).

The GI example is a minor case of a much more significant problem with a major theme of the report, which is that of the possibilities for independent, UK-specific, regulation. For the most part, these ideas range from the misguided to the impractical. This is because they either result in UK firms having to endure the costs of complying with two sets of regulations, or they simply lock the UK out of international markets because they are UK specific.

The ongoing attempt to construct a UK REACH system to regulate the chemicals industry is an example of the former and has already led to huge new costs and much anger from within that industry. Huge swathes of the regulatory aspirations espoused in the report are (or would be, if they ever see the light of day) of that sort, whilst others are of the second, UK-limited, sort. 

For example, it is absurd to imagine that the UK can develop a significantly different data protection regulation system to GDPR whilst still retaining the data equivalence recognition from the EU, and which is solely in the EU’s gift, and which is necessary for trade with and beyond the EU. So if it happens it will either restrict markets for UK firms or, once again, mean costly regulatory duplication. 

Outside of, perhaps, few niche areas, the UK on its own does not have a big enough market to have different regulations to the rest of the world, and nor is it large enough to see its regulations adopted as the global standard in the way the report suggests the government thinks possible. The central intellectual and practical flaw of the regulation strand of the report is its failure to recognize these to be facts, or even acknowledge them as possibilities.  

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Vague Aspirations

By far the majority of the report is given over to aspirations, of varying degrees of realism and at various stages of progress. Mostly, these aspirations of quite vague, talking of reviews, consultations, strategies and planning processes that will be launched, and so they by no means constitute commitments or policy proposals. Nor is there any suggestion as to which are priorities.

The most obvious thing to say of these reviews is that the time to have undertaken them should have been before the referendum, or at the very least before embarking on the Article 50 process and before creating the framework for the future UK-EU relationship. Launching what are in effect feasibility studies years later is, to say the least, peculiar. Many, if not most, of them will probably be found to be unworkable in the coming years. On the other hand, if they do all come to pass, Britain is in for years, possibly decades, of regulatory turmoil, in many cases probably in the face of opposition from the sectors involved, simply to satisfy a dogma of national independence at any price.

Beyond promising reviews that may lead to hypothetical reforms, the report is padded out with highly generalised ‘motherhood and apple pie’ statements. One of the countless examples is “we want to make sure transport is inclusive for all, including giving people in urban and rural areas greater choice and freedom to get around. Safer streets, better accessibility, cheaper travel options and smoother journeys will help create a cleaner, quieter, more equitable and less congested transport system.”

Such ‘word salads’ are all but meaningless and could be made by any government at any time with or without Brexit.

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Ministerial Power Grab

Alongside issues of the content of aspirations about how to use Britain’s Brexit independence, there are highly problematic indications in the report about the process by which this might be achieved. The implication appears to be that the large body of retained EU law which got written into UK law as part of the withdrawal process, and which governs a multiplicity of standards and regulations, should be dispensed without Parliament passing primary legislation. 

Whilst details remain unclear, this is already being criticised for implying a limited role for the devolved administrations. It also seems to mean a massive power grab by the Executive from the legislature, because laws will be changed by ministerial diktat. Given the emphasis, Brexiters put on the idea that voters, through their MPs, must decide on the laws that govern them this is an extraordinary irony. Under such a regime, there will be no point in people writing to their MPs about potentially hugely important changes, for MPs will have no say in them.

That so much of the report is waffle or padding, allied with the highly dubious nature of many of the claims, suggests that the case for genuine Brexit benefits was found to be so weak that on its own it would have made for an embarrassingly thin report.

Its most obvious purposes are to generate excited headlines in the pro-Brexit press and to assuage the demands of Brexiter MPs chafing for the supposed deregulatory dividend Brexit will deliver. Hence, taken as a whole, the report is a mix of overblown triumphalism to meet the first purpose and promises of great reforms just around the corner to meet the second.

What is far more important than what is contained in the report is what is omitted. For even if Brexit were to have all the benefits claimed, how can they be evaluated when there is not a single reference to its costs?

On the economic front, there are already sound measurements of the costs to date, and widely-accepted predictions of the costs to come. On trade, in particular, we have already seen the impact of new barriers on businesses, especially smaller ones, and we know that this is going to get worse as the full import controls get introduced. We also already have evidence of how Brexit is causing tax increases. And on regulation, we are beginning to see the business costs of duplication. Yet there is absolutely no assessment of these or any other Brexit costs.

In consequence, as well as being deeply flawed in many of the claims it makes, the entire report is fundamentally meaningless.