Observations of an expat: Brexit is back

Britain’s political classes have finally recognised the elephant in the room. It is now safe again to utter the B-word.

Brexit was embraced (narrowly) first in the 2016 referendum and then again in the 2017 general election.

Political leaders decided that the issue was decided and to press for a return to the EU would damage electoral chances.

The Labour Party decided to work on the basis of trying to achieve the best of a bad job. The Liberal Democrats, who had led the charge against Brexit, remain committed to EU membership as a “long-term aim” but have shelved it for the short and medium term.

But then they had not foreseen the logical consequence of Brexit—the disastrous mini-premiership of Liz Truss.

They should have. Truss clearly stated her plans in her campaign for the Conservative Party leadership. And before that it was outlined in detail in the 2012 book “Britannia Unchained” written by Truss and Kwasi Kwarteng along with Chris Skidmore, Priti Patel and Dominic Raab – all ministers in Boris Johnson’s “Get Brexit Done” government.

Truss has repeatedly stated that Britain is a “bloated state with high taxes and excessive regulation” and that the country’s workers are “among the worst idlers in the world” Her solution—and that of the libertarian right-wing of the Conservative Party—was cut taxes, throw out regulations, reduce public spending, and establish tax-free enterprise zones to attract foreign companies. Controlling immigration was not a core policy. It was a useful sidecar bandwagon which could be used to attract voters.

None of the above could be done as members of the European Union. Brussels is a maze of regulations designed to protect workers’ rights, the environment, consumer rights, freedom of movement and competition between member states and their companies.

The only way for the libertarian Tories to achieve their aims was by “taking back control” from Brussels.

Boris Johnson may have well gone the Truss route back in early 2020 but then “events” (as the late Harold MacMillan would have said) interfered. First the pandemic and then the war in Ukraine intervened. Spending priorities and government policy had to be shifted to deal with these immediate and pressing problems. And both these issues required huge expenditure. Where was the money to pay for them?

It was no longer coming in the form of Brussels handouts. Neither could it come from foreign investors because Britain no longer offered them access to the wider European market. Increased taxes were anathema to a Conservative government. So the Johnson government borrowed.

In 2016 the government debt was $1.98 trillion and 84.5 percent of the country’s GDP. In September 2022 it was $2.4 trillion which represented 100.5 percent of the GDP.

By the time Boris Johnson was thrown out of Downing Street in July 2022, Britain was in a financial mess. Interest on government borrowing was rising fast, energy prices were going through the roof and ten percent inflation was igniting a series of trade union disputes.

It was not the right time to launch the Brexiteers libertarian programme. But this did not appear to register with them. Truss announced that she planned “to reap the benefits of Brexit”  Johnson publicly backed Truss who in turn appointed her co-right wing author Kwasi Kwarteng as Chancellor of the Exchequer.

Kwarteng quickly sacked Sir Tom Scholar, the top civil servant in the Treasury, because he refused to support his budget plans. The new chancellor also failed to submit his proposals to the Office of Budget Responsibility (OBR) – the government’s de facto auditors because he knew they would reject his budget as an unfunded disaster.

And it was a disaster. The market delivered an historic rejection of the Truss-Kwarteng economic plan. The pound plunged to new lows against the dollar and interest rates soared. Kwasi Kwarteng successfully sabotaged the British economy in one 30-minute speech. Jangled nerves were settled somewhat by the sacking of Kwarteng, a reversal on the budget’s key libertarian points and the calming influence of the new Chancellor Jeremy Hunt.

But within days the Truss government faced another crisis when its whips manhandled Conservative MPs on the floor of the Commons in order to defeat a Labour Party proposal to ban on fracking.

The market also dipped a bit after the June 2016 Brexit vote. In the 2017 and 2019 general elections traders were probably more worried about a left-wing Jeremy Corbyn victory than Brexit. The start of the Truss government was its first opportunity to deliver a verdict on the first real Brexit-driven government. And it did.

* Tom Arms is foreign editor of Liberal Democrat Voice and the author of “The Encyclopedia of the Cold War” and the recently published “America Made in Britain” that has sold out in the US after six weeks but is still available in the UK.

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24 Comments

  • ‘But then they had not foreseen the logical consequence of Brexit’. It was obvious to me, for one, before the referendum. Not Truss, of course, but that the leading Brexiters’ aim was 100% to be free to trash environmental protections and workers’ rights.
    Well, the free-market Brexiters, that is. The ‘Lexiters’ imagined they’d be free to make the UK a workers’ paradise.

  • Nigel Jones 22nd Oct '22 - 6:31pm

    I think most of this is correct. However, the Trussonomics is not so much the logical consequence of Brexit as one of the main reasons why right wingers wanted Brexit, including Farage. Many people (in Red Wall seats like where I live and i was our candidate here) were so keen on Brexit for other reasons (like immigration and the mistaken idea that they were being ruled undemocratically by foreigners) that they could not see this right wing intent to remove all those laws that prevent powerful or wealthy people from exploiting ordinary folk; many were also not fully convinced that we needed to take climate change very seriously either and that we could manage crime and security on our own like we did in the past.
    I hope you are not suggesting at this stage that it will be easy to convince people of what you say by blaming it on Brexit. Many in Red Wall seats still hold very firmly to Brexit and will not easily be convinced by economic arguments that begin by saying it was a mistake. They still believe they can have all the benefits of trade with the EU, workers rights etc.. without being in the EU. The praise heaped on Boris over Ukraine will also convince them that we can do our bit for peace and security on our own too.

  • Arthur Clive Trussel 23rd Oct '22 - 3:27pm

    part 1:
    I was at the Re-Join EU march yesterday where 50,000 people blocked central London for several hours and ended up outside the House of Parliament. They gave some very concerned and moving speeches about leaving the EU. – I have not seen anything in the media – although helicopters were buzzing about?.
    They asked; “Where is Ed Davey?” “Where is Kier Starmer?”
    This is the most important problem after Climate Change!
    For the people there; it is not over and done with, and they are not going to- “suck it up” and “Get over it”.
    There is no way to “Make Brexit Work” and they know it!
    Guy Verhofstadt gave a very good speech saying that he knows that the EU would really welcome us back – other M.E.P’s said this. He said one reason is that Brexit has damaged the EU as well as the UK. Also, as well as trade, there are many other benefits, it would strengthen the EU against all the ongoing problems – energy, Putin etc,etc,etc.
    We must be the party that really knows this and explain all the wonderful positives for various sections of our community and that re-joining is the only way for this country to grow – really grow! We are certainly not the “Anti Growth Coalition”!

  • Arthur Clive Trussel 23rd Oct '22 - 3:28pm

    Part 2:
    On my pole I had my Lib/Dem flag between the EU flag and a Ukraine one – and, it was the only one I saw during the entire 5 hours I was there! This was commented on by a couple of Lib/Dems that came up to me.
    All these people represent many, many more that couldn’t afford to get there or didn’t know about it (media repression?)- and, as the brexit consequences feed through – this number is growing by the day!
    In September the voting was: 53% wrong to leave the EU; 34% right & 14% don’t know. (Statistica – https://www.statista.com/statistics/987347/brexit-opinion-poll/)
    The “believers” in brexit are certainly declining. A drop of over 20% since April last year- about the same increase in “Wrong to Leave” of course. This is an enormous lead.
    The problem is- they have no one to represent them! Why on earth are we not taking advantage of this – instead of being so timid? We’ll never get anywhere unless we wake-up to the rigged voting system and completely change our approach.
    The “Volt UK party” people were there – with their emblem on the big screen all the time. and, I think that the “Re-Join EU” have started a party?

  • David Franks, 23rd Oct '22 - 3:31pm

    For many of us Brexit has never gone away. It is all far too much of a disaster for us to simply “move on”. The effects are not only financial, Britain’s place in the world has been hugely diminished, our so called “governments” are a joke. Recently on holiday on a tiny Greek island people from Canada, Australia, and many European countries really could not understand why Britain could have taken such a stupid decision. The whole idea of a European Unity was started in 1946 by British, European and US leaders who wanted to make sure the 17+ million deaths in two European wars could not be repeated. That’s what the Tory and Labour Parties have thrown away.

  • Arthur Clive Trussel 23rd Oct '22 - 3:31pm

    Part 3:

    First I think we must change our leader. He doesn’t come across on the TV as dynamic and fresh. He doesn’t stand out, and is linked to the old coalition. (As nice, caring and knowledgeable as he is) . I’ve had people saying; your problem is Ed Davey!
    We need to change (ASAP!!) – and so that it is noticed – we need a woman. We have some very good women – I would prefer Layla Moran.
    Also, we must SHOUT that we are a Pro-EU Party and we are the only Main party that believes that the People should be having a vote on re-joining.
    I know the stick-in-the-muds in the party will worry about losing a few votes – although it shouldn’t, if it’s what we believe in?
    There is an enormous, homeless group, despairing at us and the Labour Party as we seem to be ignoring the obvious problem and pretending we can do nothing about it. This is enabling the ultra Tory mess to continue.

  • David Franks, 23rd Oct '22 - 3:35pm

    We should never forget that 37% of the electorate voted to leave the EU. 35% voted to remain a member and 27% did not vote. Democracy in action?

  • Arthur Clive Trussel 23rd Oct '22 - 3:59pm

    Part 4 & Last:
    It should be explained – loudly, that Truss has shown how the Tory “Singapore on Thames”, “Cut all EU Rules”, “Cut Taxes”, “Trickle-down economics” &” “reap the benefits of Brexit” is a disaster for most of us and importan
    tly, that it is the Tory Brexit that has enabled them to do this.
    These people need a party leader that speaks out loudly about the Truth, and not afraid to mention the word Brexit. If something is wrong and damaging – it is wrong and damaging and not to be ignored.
    The Liberal Democrats could really rise on the back of Re-Joining.

  • Martin Gray 23rd Oct '22 - 5:46pm

    Cassie …
    What exactly are those workers rights …
    Thousands of workers on the minimum wage , zero hours contracts, agency work – all throughout our membership of the EU – would be forgiven for thinking they didn’t exist…
    Those rights meant nothing to them…Not now not then …

  • Mervyn King is one of the grownups Austerity could be more difficult this time round
    “…if we want European levels of welfare payments and public spending, you cannot finance that with American levels of tax rates. So we may need to confront the need to have significantly higher taxes on the average person. There isn’t enough money there amongst the rich to get it back.”
    “Time to front up, to have a narrative that explains to people the consequence of a), allowing inflation to pick up, b), confronting Russia and supporting Ukraine, which has reduced our national standard of living, and c), the need to help future generations cope with the increased national debt we are leaving to them.”

  • @Martin. What a strange argument. Whether or not workers felt they benefited from things like the 48-hour week, holiday entitlement, or equal pay for men and women – how does that negate my point, which was that the Tory right wanted Brexit so they could have a ‘bonfire’ of the rights of the majority of workers in the UK?

    Btw, I think you’ll find many millions of workers will realise they did actually benefit if those rights are taken away.

  • Peter Martin 23rd Oct '22 - 7:26pm

    @ Joe,

    ” the need to help future generations cope with the increased national debt we are leaving to them”

    Future generations will have a standard of living determined by what they produce. Their governments will decide how what they produce will be shared out. They won’t be able, or need to send anything back and forth in time to repay anything!

    We only need to look at how well the post-war generation did to appreciate that relatively high government debts, which were accrued of necessity during WW2, aren’t the macro-economic millstone of neoliberal imagination.

  • Nigel Jones 23rd Oct '22 - 8:05pm

    Joe Bourke, you make an excellent point and I am extremely concerned that in the media recently hardly anyone has pointed out that our tax take is significantly below many other European countries; see the IFS reports, which point out that we WERE heavily taxed in the 1960s but all that has changed. Is not this an important simple point that Ed and Keir should be telling people ?

  • Martin Gray 23rd Oct '22 - 8:15pm

    Cassie – as I’ve said just what was this utopia that workers were living in when in the EU …
    Zero hours contracts, minimum wage agency work was the norm for hundreds of thousands of workers all throughout our membership of the EU …
    Someone doing a triple shift on the minimum wage zhc at some faceless warehouse on the edge of town just wouldn’t recognize those rights bestowed upon them ..
    Wondering wether you’ll be working from one week to the next was & is the norm for many – EU or no EU…
    The social contract was a smokescreen – nothing fundamental changed for those at the bottom…

  • Nigel Jones 23rd Oct '22 - 8:17pm

    I must come back to my previous point. There is excellent argument here, but it will not get through to the majority in the way it is put. Emphasise how wrong the Libertarian economic arguments are and while doing that point out where Brexit has caused extra problems, but do not start with Brexit; that will shut their ears and minds. People do not understand the connections between UK and EU; they do not realise that workers rights were aided by the EU and will still believe we can fight for them without joining the EU. To get the above arguments across to enough people to make a difference in who gets elected will take a long time.

  • @Martin. The OP said, of Labour and the Lib Dems: ‘they had not foreseen the logical consequence of Brexit’.
    I posted that it was obvious to me what the logical consequence would be. They would tear up workers’ rights and environmental protections.

    Is all.

    So why you are lecturing me on what life is/was like for some sections of workers, I have no idea.

    Btw, having, in recent years, a) done agency work, and b) a minimum wage job, after ‘new technology’ ended my old career, I don’t need that lecture. And the fact a lot of workers never benefited from EU employment protections doesn’t mean it’s no biggie to scrap things like holiday entitlement for the millions that do.

  • Peter Martin 24th Oct '22 - 8:43am

    @ Cassie,

    “They would tear up workers’ rights and environmental protections.”

    This can happen in any democratic system, including a future more democratic EU, if a majority of the electorate support these kinds of policies. You seem to be suggesting that we place our faith in a institution which is far from democratic to prevent these kinds of abolitions.

    How about placing some faith in the democratic process and the good sense of the British people instead? We are only one election away from electing a government which has all the powers to not only strengthen the necessary legislations but to actually enforce them.

    As Martin Gray rightly suggests the UK’s record on workers’ rights during our time in the EU hasn’t been at all satisfactory. We relied far too much on the EU to act as a benevolent nanny rather than take the necessary actions ourselves.

  • Peter Watson 24th Oct '22 - 8:51am

    @Cassie “And the fact a lot of workers never benefited from EU employment protections doesn’t mean it’s no biggie to scrap things like holiday entitlement for the millions that do.”
    I don’t want to put words in Martin’s mouth – he may be approaching this with the same remain/rejoin bias as me or he may not – but perhaps, then, it is more important for Lib Dems to be campaigning for those employment rights explicitly, rather than EU membership as a possibly ineffective way to achieve them.
    The party seems to have opposed the 2021 IR35 reforms, but making it easy for individuals to be engaged/employed as limited companies could be seen as a way of trading a lot of employment rights for a lower cost to the “employer” and a lower tax bill for the “employee” (and the “employer”), a kind of zero-hours contract situation, albeit with far more perks for the better off. I could imagine Trussonomics pushing this sort of pseudo-self-employment further down the pay scales without it being inconsistent with the Lib Dem position! 🙁

  • David Garlick 24th Oct '22 - 11:10am

    Poster at the bck of a BBC interview says it all. ‘BREXIT HAS DONE FOR US!’

  • @Peter. My point was that Brexit was always going to be about trashing EU rules that keep us safe in may ways. And if you or Martin think it’s just rights that a lot of workers never had, it isn’t.
    ‘Jacob Rees-Mogg’s proposals for post-Brexit legislation could result in 2,400 laws disappearing overnight – including a ban on animal testing for cosmetics, workers’ rights and environmental protections’ (Guardian today).
    Unison general secretary Christina McAnea, said: “This is a countdown to disaster for all working people. It would mean turning the clock back to Dickensian times when workers had no rights.”
    That is Brexit. That is ‘the will of the people’.

  • Peter Watson 24th Oct '22 - 12:33pm

    @Cassie “It would mean turning the clock back to Dickensian times when workers had no rights … That is Brexit.”
    That would only be true if we joined the EU in Dickensian times! Workers’ rights were hard-fought for long before we joined, some were independent of membership, and some were undermined while we were members. Turning the clock back is because of the beliefs of many who supported/led Brexit rather than because of Brexit itself.

    Membership of the EU is important – and it would be good if the Lib Dems were willing to take a positive “rejoin” stance instead of just whinging about Brexit – but if we give the impression that it is a panacea then we’re just repeating the mistakes of the failed Remain campaign.

  • Thanks for a useful synopsis of recent events, Tom. It is clear with hindsight that Brexit was a means to an end and not an end in itself. Now that the end has disappeared perhaps it is time to reverse the means.

  • The Tory right wanted Brexit so they could tear up EU rules they didn’t like. Rees Mogg is now on course to do just that. This was entirely foreseeable in 2016.
    Is all I initially said and all I intended to say. Point ends.

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