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‘We’re All Worse Off’

Thought Leader: David Frum
May 3, 2023
Source: The Atlantic
Written by: David Frum

If you walked into a British supermarket this past winter, you were likely to see bare shelves in the salad aisle. Customers might have been limited to purchasing lettuce and tomatoes, if there were any lettuce or tomatoes to be found in the first place. Ask the grocers, and you’d hear technical explanations for the scarcity. High energy prices raised costs at British greenhouses; imports from warmer countries were curtailed by bad weather in Southern Europe. Behind all of these situational explanations, however, loomed a larger problem.

From the time a tomato is harvested, every minute counts en route to the purchaser’s table. In March, the BBC reported that Britain’s departure from the European Union has added 10 to 20 minutes of additional paperwork to every truckload of tomatoes shipped from Spain—longer if the truckload mixes different produce varieties. Ten to 20 minutes may not sound like much. But multiply that burden by thousands of trucks, squeeze the trucks through the bottleneck of the single underwater tunnel that connects Britain to freight traffic from Europe, and costs and delays accumulate. The result: winter tomato gluts on the continent, winter tomato shortages in the United Kingdom.

The temporary disappearance of some fresh fruits and vegetables for a few weeks in winter may be only a nuisance. Yet such nuisances are ramifying throughout the British economy, signals and symptoms of larger, system-wide trouble. British consumers are spending less on new clothes and shoes than they did in 2018 and 2019. The British are holding on to their cars longer: The average age of the vehicles on British roads has reached 8.7 years, a record. The British made about 2 million fewer trips abroad in 2022 than they did in 2018 and 2019, an almost 20 percent decline. Lingering COVID concerns offer a partial explanation. But the UK and most of its European Union neighbors had dropped most travel restrictions in January 2022 and the remainder by March.

Altogether, Britain is expected to be the worst performing of the world’s 20 biggest economies this year. The British government’s official forecaster predicts that after-inflation household incomes will decline by an average of 7.1 percent over the three years ending in spring 2024. On the present trajectory, Britain will not return to 2019 levels of disposable income until 2027. By 2024, the average British household will likely have a lower living standard than the average household in Slovenia. On present trends, the average British household will be poorer than the average in Poland by 2030.

The pandemic has not helped, but the slowdown of the British economy cannot be explained by COVID. Italy has suffered more deaths from COVID than any other major European country has, yet its economy had mostly recovered to pre-pandemic levels by the end of 2021.

Britain is now paying the price for its decision to leave the European Union. Britain voted to exit in the summer of 2016. The departure was formalized on December 31, 2020. Since then, new barriers to trade, investment, and movement have risen between Britain and its nearest neighbors. Investment in Britain has tumbled, and the British economy has shrunk. By one authoritative estimate, Britain is 4 percent poorer today than if it had stayed in the EU.

Many in the British government are reluctant to acknowledge this reality. Huw Pill, the Bank of England’s chief economist, lamented in a recent podcast interview, “What we’re facing now is that reluctance to accept that, yes, we’re all worse off.”

These costs don’t necessarily make Brexit a “mistake.” Brexit was a trade: less prosperity for more sovereignty. Countries reasonably make such trades all the time. My native Canada would dramatically increase its prosperity if it abandoned its sovereignty and merged with the United States. By their continued independence, Canadians implicitly choose otherwise, and nobody criticizes them for “Canxit.” They know the cost, and they accept the cost as worth it.

But the British were not honestly alerted to the cost of their choice. In 2016, future Prime Minister Boris Johnson campaigned for Brexit in a big red bus carrying a huge printed message: we send the eu £350 million a week. let’s fund our nhs instead.

The British were promised that Brexit meant more: more resources for public and private consumption. Instead, Brexit has predictably turned out to mean less, and the British are surprised, baffled, and angry.

The British health service is now threatened with waves of strikes by nurses and junior doctors. With the country’s finances in a post-pandemic, post-Brexit mess, the British government has squeezed the pay of health-care providers. Between 2010 and 2022, nurses have suffered a nearly 10 percent decline in their pay after adjusting for inflation; junior doctors have lost much more, according to some estimates. Many have emigrated: One in seven U.K.-trained doctors now works abroad, according to a Financial Times analysis.

Britain is compensating by importing health-care providers from Africa and Asia. Yet this contradicts another central promise of Brexit: less immigration. British immigration numbers are very tangled, partly because Brexit has induced large numbers of EU citizens living in Britain to seek British citizenship. These status changes register in the statistics even if the actual human beings have not moved at all. Still, as best as one can tell, migration into Britain has genuinely accelerated since the end of 2020, driven by asylum seekers from outside Europe and from Ukraine.

The British will vote in a national election probably sometime in 2024. You would think this coming election would be the appropriate time to assess the country’s choices and consider whether to choose a different path. You’d think wrong.

Brexit rearranged British politics in surprising ways. Brexit was backed by the Tory right and the Labour left. The Leave vote was highest in the Labour strongholds of the Midlands and northeastern England; Remain was strong in the affluent areas of London and the Tory south of England. The far left of the Labour party had always disliked the European Union as an impediment to schemes to protect and subsidize British industry from foreign competition. Jeremy Corbyn, then the Labour leader, declined to join then-Prime Minister David Cameron on the Remain side. Indeed, Corbyn has been described by one of his closest political allies as a Brexiteer “in his heart of hearts.”

Corbyn resigned in 2020. His successor as Labour leader, Keir Starmer, campaigned against Brexit in 2016. To win the next election, however, Starmer must recover northern English seats lost to the Conservatives in 2019. And so, even as polls show that a big majority of British voters now regard Brexit as a mistake, Starmer has pledged not to reverse course.

In a major speech in July 2022, Starmer dismissed criticism of Brexit as “arguments of the past.” He embraced the old Brexit slogan “Take back control” and vowed, “So let me be very clear: With Labour, Britain will not go back into the EU. We will not be joining the single market. We will not be joining a customs union.”

But if Britain can’t vote for a new approach to Europe, how does it meet the costs imposed by its present approach to Europe?

The short answer to that is more of the denial that Pill denounced.

In economic terms, Brexit means that British people must work harder and consume less. But Starmer’s 10-point manifesto for 2024 promises more consumption: more spending on health and public services. That would be a difficult-enough promise for today’s Brexit-hobbled British economy. Starmer undertakes to make the future British economy even less efficient than today’s, by joining more spending to more government management of key industries, specifically railways, energy, and public utilities.

Britain is a society of tremendous capabilities: deep political stability and rule of law, a highly educated and skilled population, a world-spanning language, the planet’s most recognized and admired cultural institutions. The whole world will watch the coronation of King Charles III as carried by the BBC, as styled by British designers, as celebrated by British musicians—and as mocked by British comedians. But developing those assets means accurately assessing Britain’s liabilities, and fearlessly developing plans to overcome them. That assessing and planning will require honest communication with Britain’s voters.

The next government of Britain will likely be a Labour government led by Keir Starmer. It fell to Starmer’s greatest Labour predecessor, Clement Attlee, to explain to the British people where they stood after the Second World War. Addressed as public-spirited adults, the British people met the challenge, shouldered the burden, and built new prosperity. They can do it again—if led in the same forthright way.

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