Building on Brexit
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We've left the EU. The establishment must stop living in the past.
Britain is still in Brexit limbo. We've left the EU but the Wesminster blob is reluctant to do anything with Brexit. A decision was made (with the backing of parliament) to leave the single market and that demands that we adapt. But we're not doing that. The Tories, with their Windsor Framework, have committed us to continued alignment, while the thinking within Labour is to go one further and unilaterally declare full alignment with a view to restoring instruments like mutual recognition.
There's a problem with that though. The thing about the single market is that you're either in it - or you ain't. Alignment of regulation without adopting the full stack of the single market will not restore our EU trade. As much as the food industry relied on "frictionless trade" from regulatory harmonisation, it also depended very much on an (effectively) unregulated pan-EU haulage industry, and a ready supply of exploitable low wage labour.
The problem there is that even if we had remained in the single market, the EU is experiencing many of the same labour shortages, an acute shortage of HGV drivers and a shortage of vets. Single Market supply chains as we knew them were already unsustainable and ready to implode. Maintaining EU regulation to sustain that model when we're not in the single market, and when the model is collapsing, is absolutely insane.
Over the last three years we've seen an acceleration of small abattoir closures, partly due to rising energy and labour costs, but also legacy EU red tape. We need to ease the regulatory burden on small abattoirs, moving away from the EU veterinary system - which is bureaucratic, expensive to maintain, and doesn't add value in terms of food safety. But self-appointed Brexit trade experts (remainers to a man) believe that regulatory harmonisation alone equals more trade, and push for continued alignment even if it means losing small, sustainable food production for the domestic market.
Labour is also wrong on this. We do not want an SPS agreement with the EU. It makes sense for landlocked Switzerland to have one but Britain, as an island nation, can better protect food and livestock biosecurity by maintaining its own regime. It may cost more, superficially, in terms of border friction - but not when you add up the cost of livestock diseases and food scares. The more you think about it, the more insane it was that we ever joined the EU veterinary/SPS system.
Meanwhile, the EU is pushing for Net Zero circularity in the chemical industry, imposing massive new costs on chemical manufacturers, who are already struggling to stay in business because of energy costs. Economic realities don't intrude on the thinking of EU policy makers. (They've already decided to destroy the European auto industry with the ICE ban). Brexit might have caused some interim costs for the UK chemical industry, but if the EU goes ahead with its net zero chemical reforms, the UK industry might well be the last man standing - provided we act now - and re-regulate accordingly.
But again, we're not going to do that. Britain under the Tories is in lockstep with the EU on Net zero policy, and Labour will be the same or worse - because they believe our only salvation lies in maintaining EU regulation - even if that regulation is absolutely dreadful.
But it's also because they don't have the brains or the imagination (or the interest) in re-regulating. They're far too used to having technical governance done for them. Many of the trade bodies are the same - with the NFU calling for continued alignment. They're stuck in the past, failing to recognise the urgency of the situation.
There is a general belief in the political blob that Brexit was a mistake, and that we should, at the very least, re-join the single market. The thing is, though, we *did* leave the EU, and parliament voted to leave the EEA. They made that choice, and there is no putting Humpty back together again - which is what they're attempting to do with voluntary alignment.
Whatever they believe, it is not going to happen. The EU has said as much. Even a basic SPS deal is at least ten years away and will take as long to negotiate its final form. EU producers are likely to lobby against such a deal now that we're out of the single market. We have to adapt to that reality and start regulating in the national interest - towards regulatory objectives of our own making.
We now have two options. We either run with the choice we made in 2016 and get busy trying to make the best of it (and it's certainly not all bad), or we waste time trying to keep a failing status quo from falling apart in the vague hope that the EU might throw us a bone if we're a bit nicer to them. If we continue with this remainer delusion, then the economic consequences of Brexit will be far worse than they ever needed to be.
This is not a question of "believing harder in Brexit to make it work". This is about recognising that a we have set upon a major change in leaving the single market that cannot realistically be undone (and certainly not for the next twenty years) - and the more we try to undo it - or pretend it never happened, the more damage we will do.
Follow Pete North at @FUDdaily.
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