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Sensemaker: Postcard from Brexitland

Sensemaker: Postcard from Brexitland

What just happened

Long stories short

  • Apple reported its first decline in revenue in more than three years.
  • Argentina unveiled a new 2,000-peso banknote (worth about £9) with inflation at 95 per cent.
  • An Australian magistrate dismissed criminal charges against Nick Kyrgios, the tennis player, even though he pleaded guilty to assaulting his girlfriend.

Postcard from Brexitland

This week a poll for the UnHerd website found that only three of 632 parliamentary constituencies in the UK still think Brexit wasn’t a mistake. Two thirds of Britons would welcome another referendum. Even on the hard right, the proportion afflicted with Bregret has risen six-fold since 2016, to 29 per cent.

So what? Voters increasingly agree that Brexit isn’t working. Outsiders looking in see a straightforward solution in rejoining the EU. EU leaders welcome the idea, but Labour and Conservative politicians continue to observe a vow of silence. Brexit can’t be blamed. It can only be fixed, done better, made to work.

A poll is a snapshot, binding no one. Brexit is a giant chainsaw, running on fumes and wielded these days without much purpose, yet still putting everyone on edge at the mere rattle of its engine.

Impact. Three years since the Brexit withdrawal agreement came into force it’s possible to quantify its effects on the economy with data that’s rejected by diehards as defeatist or wrong but still worth noting. 

  • GDP. The Office for Budget Responsibility and the Institute for Fiscal Studies put growth foregone so far as a result of Brexit at 4 per cent. The Centre for European Reform (CER) puts it at 5.5. 
  • Output. A new study for Bloomberg Economics says this equates to a £100 billion-a-year hit to output. 
  • Trade is steady compared with pre-Brexit forecasts and Britain’s European competitors, back at pre-pandemic levels and worth £550 billion a year. But the CER says goods trade is 7 per cent lower than it would be had the UK stayed in the EU, and even this relies heavily on trade deals that in almost every case are facsimiles of EU deals.
  • Investment and the tax take are down by 11 per cent overall and £40 billion a year respectively, compared with the CER’s counterfactual Remain model. (Net UK contributions to the EU budget in each of the last four years before withdrawal were £7-7.5 billion.)
  • Workers. There are 370,000 fewer EU workers in the UK than before Brexit, contributing to labour shortages from farming and construction to health and social care, even though net inward migration is running at record highs despite Brexit.

False alarms. Sterling has not recovered since losing 20 per cent of its value when the 2016 referendum result was announced. But there was no immediate financial crash as some Remainers forecast; nor has the City emptied of high-paid finance workers. Only 7,000 of 70,000 have relocated to alternative EU financial sectors. 

Dividends. No longer subject to the Common Agricultural Policy, the UK is introducing Environmental Land Management schemes (Elms) that could deliver big improvements in carbon sequestration and biodiversity. It’s also true for those who value such things that the UK no longer has to adopt EU laws, including on immigration, or pay annual EU dues.

But still… The party that delivered Brexit is finding it hard to deny that in addition to the negative economic consequences listed above it has

  • created new customs borders with the EU and within the UK;
  • failed to curb immigration either by legal routes or small boats; 
  • failed to deliver extra funds to the NHS as promised;
  • weakened the British union by boosting support in Northern Ireland for a united Ireland and for independence in Wales as well as Scotland;
  • denied British students the benefits of the Erasmus programme;
  • denied British scientists the benefits of the Horizon programme;
  • denied British citizens the freedom to live, work and access benefits and healthcare as of right in the EU’s 27 member states;
  • stripped British citizens of their European citizenship; and 
  • stripped Britain of its leading role in the EU as a champion of peace, democracy, free markets and the rule of law.

Demographics. YouGov’s Brexit tracking poll shows an overall 14 per cent decline in support for the project in six years, 35 per cent of which is accounted for by supporters dying and opponents reaching voting age. On present evidence, raw demographics will continue to shrink the Brexit base and expand the number wanting a rethink.

Politics has not yet adapted to this trend. Labour’s taboo on public discussion of rejoining the EU will last as long as the Conservatives save Keir Starmer the trouble of talking about Brexit by making it fail. Diehards in the press cling to the dream but don’t deny it’s failing – Iain Martin has resorted to the bracing argument that Brexit means there’s no one else to blame.
Across the Channel, Ursula von der Leyen, Emmanuel Macron and Michel Barnier say the door’s still open. Macron will host an Anglo-French summit in Paris next month at which his plan for a new European Political Community will be discussed as an alternative or precursor to rejoining, depending on your view. King Charles will attend with Rishi Sunak. If they listen carefully over the sound of the sputtering chainsaw, they might hear a new wind blowing.


Cap not fitting
The oil price cap imposed on Russia in December may not be working. At first it seemed that a European embargo, combined with a cap of $60 per barrel for non-European importers wanting to avail themselves of European insurance, was driving down world prices for Russian oil and thus slowing the rate at which the Kremlin could refill its war chest. The idea was that India and China could pay less because no one else was offering more. But the Economist reports that the discounts these two big buyers say they are getting from Russia are often exaggerated, and more and more Russian oil is reaching end users under the radar, without using any western shipping or finance. The share that does use western services has fallen from half to 36 per cent in two months flat. The IMF’s forecast that Russia will grow faster than the UK this year gets less baffling by the day.


Old tech, fresh tensions
A Chinese surveillance balloon has been detected hovering over the US state of Montana, according to the Pentagon. While fighter jets were sent to track the device, Biden was advised against shooting it down for fear of falling debris. Why such retro tech? Essentially a camera suspended beneath a balloon, a spy balloon is cheaper to launch and easier to retrieve than a satellite, and can gather more information as it can scan more ground, linger over territory for longer and fly at lower altitudes. The Pentagon’s decision to announce the finding coincides with US secretary of state Antony Blinken’s visit to Beijing this weekend – including a possible meeting with Chinese president Xi Jinping – and is probably intended to put China on notice. And why Montana? That’s where America keeps some of its biggest nukes.

The 100-year life health, education AND GOVERNMENT

Cold calling
Perhaps just occasionally, journalism does a public service. Britain’s energy regulator, Ofgem, has asked companies to suspend the practice of force-fitting prepayment meters after a Times investigation found contractors working for British Gas had broken into homes of vulnerable people to install the devices, including families with young children and people with disabilities. Ofgem’s rules state such devices should not be force-fitted in homes of people “in very vulnerable situations”. There were also calls to investigate the role of the courts in issuing warrants to energy suppliers – a separate investigation by the i newspaper last year alleged hundreds of warrants were signed off in minutes. British Gas owner Centrica is expected to report a near eightfold increase in earnings when its full-year results are released later this month.

Our planet CLIMATE AND geopolitics

Gift to the nation
Anyone driving along the UK’s A1 motorway between Leeds and Newcastle should exit around junction 50. From today, English Heritage is welcoming the public to the Thornborough Henges, two huge henge monuments that are part of a Neolithic complex in North Yorkshire described as the “Stonehenge of the North”. The two henges, along with parts of the surrounding landscape, have been gifted to the nation by Tarmac, the road surfacing company, and will come off England’s heritage at-risk register. The Thornborough Henges are three human-made, enclosed earth circles, each more than 200m in diameter and dating from 3500 to 2500 BC (the third henge is privately owned). They are roughly aligned north-south and there’s evidence they were covered in gypsum, a mineral that would have made them glow white.


Shining a light
Today, Pope Francis is travelling to South Sudan, joined by the Archbishop of Canterbury Justin Welby and the leader of the Church of Scotland, Iain Greenshield, for a “joint pilgrimage” to draw the world’s attention to the world’s youngest country, which has been engulfed in civil war since 2013. The NYT reports that a new tarmac road, still a rarity in the country, has been laid in anticipation – although the terrible infrastructure means that while six million of South Sudan’s 11 million people are Catholic, the crowds greeting the “three wise men” in Juba are unlikely to be as large as in Congo, where Francis drew crowds of a million or more. 

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Giles Whittell

Photographs Getty Images, English Heritage

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