Bonjour Europe! Can we be friends again?

Something is going on à propos Europe. First the Governor of the Bank of England, Andrew Bailey, says en clair, Brexit has damaged, is damaging and will continue to damage the economy. He used central banker jargon saying Brexit had “weighed” on the economy especially on trade in goods.

Bailey avoided pointing out that this is the consequence, not of the vote in 2016 to leave the EU Treaty — which could have been manageable — but of the ultra hard version of Brexit “negotiated” by Boris Johnson, without the advice of anyone knowledgeable about trade economics.

Most economists, including those at the Office for Budget Responsibility, reckon that Brexit has cost between 4 and 5 per cent of GDP. A report by Cambridge Econometrics early in 2024 reckoned the UK economy is almost £140 billion smaller because of Brexit . London alone has 290,000 fewer jobs than if Brexit had not taken place. 

The Brexit vote was endorsed in two subsequent general elections, 2017 and 2019. However, the Brexit era Conservative politicians were repudiated in July 2024 as clearly as Kamala Harris was three months later in America. Nigel Farage, who had been turned into a major national figure — nearly as famous as Gary Lineker — by the BBC’s Today and Question Time programmes, finally got into the Commons in July 2024. He is now on the fourth anti-European party of his career, yet despite having other BBC-promoted Brexiteer candidates like Lee Anderson and Richard Tice, Farage’s isolationist Reform Party has only 5 MPs — not even 1 per cent of the Commons.

More than 120 of the 411 Labour MPs elected in what some of us see as the Brexit repudiation election last July are members of the Labour Movement for Europe. This group is ably chaired by Stella Creasy, who is building an impressive network of allies in the European Parliament and the political classes in EU capitals.

Equally important are the 72 Liberal Democrat MPs, all pro-European, who trounced the Brexit believers led by Rishi Sunak and Nigel Farage. Led by Sir Ed Davey, who was unafraid to criticise Brexit at a time when it was a politics that dared not speak its name, the LibDems join with Scottish, Welsh and Irish nationalist MPs as well as Green MPs. The overwhelming majority of MPs in the 2024 House of Commons accept that Brexit is hurting their constituents. 

The official Labour line, enunciated by Sir Keir Starmer at the Irish Embassy in 2022, was that he “would make Brexit work” – the identical metaphor used by Theresa May in her unhappy premiership. This has been quietly dropped.

Instead, the new language is of “reset”. The Chancellor Rachel Reeves has spoken of the “structural challenges which have come from Brexit”. This is the first acknowledgement at a senior Labour government level that cutting links with Europe is now by any objective analysis a major negative for the UK. This Bailey-Reeves double act and the July election ends the first Act of the unfolding Brexit epic.

To be sure, Labour ministers still parrot the official incantation of the Holy Brexit Trinity – No to the Single Market, No to the Customs Union, No to Freedom of Movement. The latter is superfluous, as once you say No to the Single Market it follows automatically that there is no freedom of movement.

But like British ministers still thinking in World War One terms in the 1930s, these concepts are out-of-date. Turkey has been in a Customs Union with the EU since 1995 and this has not led Turkey to obtain free movement or access save in the area of some goods.

The EU’s barriers to trade are not via tariffs but through thousands of pages of  regulations to allow free exchange, especially in the services sector, between 27 sovereign nations. 

In 2016, Boris Johnson promised that a Leave vote would not lead to a loss of trade access, or to any limitations on the rights of British citizens to work, live, study or travel in Europe without submitting to border checks — as if coming from a third world nation.

Unfortunately after the 2016 vote Labour under Jeremy Corbyn and his shadow Europe Minister, the newly elected lawyer Sir Keir Starmer (who had zero experience of European possibilities), joined with the LibDems and other opponents of Brexit such as Alistair Campbell in pouring all their energy into a second referendum.

This policy was repudiated in the 2019 and 2017 election. Labour and LibDems sensibly dropped the second referendum demand after 2020.

It is the main reason why the simple demand “Rejoin Now!” makes no sense. It would require a new referendum. And while opinion polls certainly show a big majority who see the 2016 vote as a mistake, that is not the same as saying that a new Rejoin plebiscite would produce a Yes vote.

Much of the same coalition of off-shore owned media now strengthened by big money behind the GBNews, Unherd, and Musk’s X (Twitter) would launch a non-stop propaganda war of anti-immigrant populism against rejoining the EU.  

Business has already decided it doesn’t like Labour and every motorway or road going through the countryside would be lined with placards urging a No vote. This is despite the fact that Brexit has done more harm to  agriculture than any other economic sector.

So Labour, LibDems, the SNP and businesses who want to get back to normal trading with Europe need to work on low-profile agreements, such as the recent agreement to allow European students to travel for school trips to the UK on collective passports, or the Windsor Agreement on trade between Britain, Ireland and Ulster. No rational citizen should want to punish young Brits by denying them the right to short-term visa-controlled periods of working or study on the continent under the proposed Youth Mobility scheme.

Norway and Switzerland, whose citizens said no to joining the EU in referendums 30 years ago, have considerable practical experience and expertise in finding solution to the problems that today’s British economic actors, universities or citizens face.

They should be studied to see how, with suitable updating and modification, they might apply to the UK. It won’t be easy as Brussels has made clear its patience is exhausted, in particular with the Swiss having their fondue and eating it. Berne negotiators wriggle to avoid having to submit to the same regulations that their neighbours Germany, France and Italy accept.

Most of the 500-plus non-Tory MPs would accept a return to common sense on Europe. At some stage a Tory MP will stand up and say the Johnson-Truss era of crude hostility  to Europe is not working. He or she will get mammoth publicity. While Nigel Farage, now drifting into pension age, will rant and rage, along with John Redwood and Michael Howard, many other Tories will be glad to turn the page on an unsuccessful dead-end ideological project. 

Denis MacShane is a former Minister of Europe

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