UK enters new year amid air of Brexit disenchantment

After a disastrous year for British politics, 2023 will see attempts by the government to turn things around on several fronts including how to navigate the post-Brexit maze.

Britain took pride in their queen during her Jubilee celebrations and her epic funeral.

But the dignity of Queen Elizabeth's passing only highlighted a general sense of disillusionment with the state of the country and its leadership.

Industrial unrest and the cost-of-living crisis are uppermost in British peoples' minds while the war in Ukraine is seen as the most pressing factor because of its effect on energy costs.

However, disenchantment with Brexit has been one of the most notable trends of 2022 with a feeling that it has not lived up to the promises made at the time of the referendum.

Two thirds or 65% of British people think Brexit has gone badly compared to just 21% who think it has gone well according to an Opinium survey in early December.

In fact, the number who would now actually vote to re-join the EU has risen to 56% compared to just 45% at the start of the year, according to the think tank The UK in a Changing Europe.

Looking back over the past year, it was the hit to Britain's international reputation that is the most striking development.

The disaster that was Liz Truss' period as prime minister led to the "moron premium" that the financial markets added to the cost of British government borrowing. That is still being felt in the British mortgage market.

Truss' premiership also prompted a warning from the IMF about her government's economic policies. This is usually reserved for the excesses of emerging economies in the Third World, not a G7 country. It was seen as a major embarrassment.

Then there were the results of Britain's efforts to strike out on its own in search of lucrative trade deals unshackled by EU regulation.

These were held out to be the glittering prizes of Brexit during the referendum. It was almost as if Brexiteers believed that countries around the world were queueing up for the chance to pay more for British imports.

However, any gain comes at a price. Pro-Brexit economists pointed out that food costs could be cut by lifting tariffs on agricultural imports. But then that would crush the country's farming industry and threaten food security.

In the event, trade agreements reached with Japan, Australia and New Zealand are not being heralded as huge improvements.

The past year also saw the value of Paris stock market overtake that of London as Britain entered recession - the only G7 country whose economy is smaller now than it was before the Covid pandemic.

When pressed to show the benefits of Brexit, figures like Jacob Rees Mogg say that it has allowed Britain to regain its sovereignty.

The idea that British courts should not be answerable to any foreign institutions has spread to calls for the UK to leave the European Convention on Human Rights. This followed several asylum case rulings.

However, Britain is set to lose sovereignty if it goes ahead and joins CPTPP, the new transpacific agreement involving countries like Mexico and Chile (as well as countries that it already has agreements with like Japan and Australia).

CCTPP would involve Britain being subject to international courts and restrictions on state aid - much like the European Single Market.

Meanwhile it is reported that around one third of British exporters have given up dealing with the European Single Market because of the amount of red tape involved. This is despite the Trade and Co-operation Agreement (TCA) agreed with the EU by Boris Johnson.

Recently there were reports that the UK would like a Swiss style deal with the EU meaning full access to the Single Market but without being an EU member.

However, the report said that Britain would not accept free movement of people.

An EU source was quoted as dismissing the idea as "wishful thinking" and reiterated its position that it would not allow "cherry picking" on single market obligations.

The British government then issued a statement saying it would never accept alignment with EU regulation, financial contribution or restrictions on its own free trade deals as well as ruling out free movement.

In other words, it is back to the arguments during the time not just of Theresa May as Prime Minister but also those from the time of David Cameron.

As with any maze, the Brexit model has led to a series of dead ends and then ending up back at the start.
There are signs of flagging enthusiasm among the Brexiteers.

The hardline European Research Group (ERG) of Conservative MPs has lost two thirds of its members according to reports. The number of paid-up members has dropped from 35 in 2020 to 12 this year.

However, there are those who still want to have another go. The Reform UK party as the successor to UKIP and with Nigel Farage as President is promising to 'Make Britain Great Again'. It believes Brexit needs to be done "properly" without spelling out what that involves.

The party received only 3.52% of the votes in the last bye-election in Greater Manchester but that was just behind the Liberal Democrats who were on 3.57%.

Farage is said to exert a lot of influence on the Conservative Party. Reform UK could certainly further damage Tory hopes in the next general election.

The other potential reappearance is Boris Johnson. It was revealed recently that he had gathered 110 nominations for the last Conservative leadership contest which was well above the threshold required to challenge Rishi Sunak.

Johnson said at the time that he decided not to run because he did not have the support of a majority of Conservative MPs. However polling suggests he remains the most popular alternative to Sunak among the public – especially in the so-called Red Walls seats in the North of England.

There is also talk of a move against Sunak's leadership in the Spring if he fails to deal with the industrial unrest and the economy.

If Johnson was to return as leader it would presumably mean a return to an antagonistic relationship with the EU.

For the moment there are signs that a solution could be agreed for the Northern Ireland protocol – subject to the approval of the DUP. But that will not solve Britain's’ long-term problem of restoring frictionless trade with the EU.

With the next UK general election not due until the end of 2024 it will be a long time to hold a position that involves self-inflicted economic harm by remaining outside the single market. It would also be a long time to hold a position that the majority of voters disagree with.