Inside Story

Current affairs & culture from Australia and beyond.

7532 words

The land that fell to earth

16 August 2017

Britain has spiralled into political failure since voting to leave the European Union. What happened, and what happens next?

Right:

Foreign lands: British prime minister Theresa May arrives for the second day of the European Council in Brussels on 23 June. Stephanie Lecocq/EPA

Foreign lands: British prime minister Theresa May arrives for the second day of the European Council in Brussels on 23 June. Stephanie Lecocq/EPA


Communism in east-central Europe after 1945, with its endless disjunctures between official rhetoric and lived experience, nurtured a rich black economy of mocking humour. The jokes of that era, as much as the region’s older folktales, are archetypal but come in national flavours. Some Czechoslovakian ones, for example, have an absurdism that subverts not just politics but life itself.

A case in point is the tale of the worker who goes into a Prague police station and says he would like to leave the country. During the grim “restoration of order” after the Prague spring, this alone is an incriminating act. But the police in the story are assiduous. Where would you like to go, they ask the visitor. Hmm, I don’t really know, he says. To help him decide, the police fetch a globe. The man twirls it round and round in a desultory fashion for several minutes. Finally, he asks: haven’t you got another one?

The United Kingdom’s vote to leave the European Union on 23 June 2016, led by the English, had some of the same flavour. Admittedly, many more identifiable concerns were in play: immigration, economics, sovereignty, accumulated distrust of London and Brussels, as well as what Rodney Tiffen in Griffith Review calls a “hankering for the old ways.” The “out” camp’s clever if shameless campaign, heavily backed by newspaper big guns, was a key asset. So were a split Conservative cabinet, the Labour leader’s anaemic stance, and the failure of the unwieldy “in” camp’s effort to convey a positive case for EU membership.

All this was swept away in the whirlwind to follow. The next fourteen months composed a spiralling political descent. A guise of stability bated it for a year, but was then pierced by a general election. By now, the quarrel over Europe had distended, the whether of EU membership succeeded by the when and how of departure, the what and where of the UK’s future, and — after Theresa May’s general election fiasco — the who of leadership.

Yet Europe had featured little in the hustings. The referendum, won and lost by 51.9 per cent (17.4 million) to 48.1 per cent (16.1 million) on a 72.2 per cent turnout, had made departure from the EU a new source of ferment in an already distressed multinational state. But the scale of the task meant Brexit also inherited the country’s existing straits: economic, national, constitutional. The leadership vacuum of 2016–17 left the country adrift. A year on, all-consuming Brexit had enfolded its host and become less a point of difference than a condition of existence.

If the seven weeks before the election on 8 June turned Britain’s political world upside down, the ten weeks since then have sent it spinning across open ground. This whole period, and especially the past three years, has shown how contingency can trump destiny — and then be interpreted as destiny at work. No one can yet be sure where Brexit is taking the UK.

A divided polity

That same dialectic has been a constant feature of Britain’s relationship with the “European project.” Its latest phase is proceeding via two parallel processes, each of them launched in the weeks after the general election and likely to take a year and more to finish. Overhanging both is the country’s scheduled departure date from the EU, 29 March 2019.

In the chambers and corridors and committee rooms of Westminster, the grinding legislative program needed to unravel Britain’s multiple ties to the EU is winding through both houses of parliament. And in Berlaymont, the European commission’s HQ in Brussels — no less a fortress, if less flavoured and freighted — bilateral talks led by officials on the EU side and politicians on the British are contesting every line of the terms of estrangement.

These are enormous yet granular tasks requiring guileful diplomacy and protean technical skills. What binds them is London’s inability or unreadiness to outline in detail a plan for Brexitannia and how to get there, including the kind of relationship it wants with the EU along the way. And that in turn reflects ineradicable divisions in the body politic that the referendum result disarranged but did nothing to overcome. These are at their most acute now at the highest levels of the Conservative Party. Even as the Brussels negotiations approach their third meeting, cabinet members publicly squabble over what the government’s policy is or should be. To adapt Walter Benjamin’s angel of history, Britain is being propelled into the future with a Janus face turned towards the past.

For more than four decades, membership of the EU has become interwoven with every area of Britain’s public life, and millions of private lives too. There are 19,000 EU legislative acts (directives, regulations, decisions, external agreements and other instruments) in force. The thirty-one-page European Union (Withdrawal) Bill 2017–19, introduced in the House of Commons on 13 July, gives parliament the job of transposing much of this corpus into British law, repealing the 1972 act that took the UK into the then European Economic Community, and sifting the valuables from the landfill.

An array of other legal measures is needed. Over the next two years, seven customised bills will address trade, immigration, customs, agriculture, fisheries, nuclear safeguards and international sanctions. A host of EU regulations and directives that became operative in the UK without legislation also have to be cleared. It will be exacting, and will consume political energies for many months.

In order to focus on these tasks, the government has already abandoned key manifesto proposals and cancelled the Queen’s speech to parliament in 2018, when Brexit will be nearing its climax. A revived Labour Party, so far granted latitude by voters over its own divisions on Europe, is preparing for a war of attrition. The House of Lords, which has an anti-Tory majority and is full of lawyer peers with nothing to lose, will add its sagacious brand of scrutiny. The proposed use of so-called Henry VIII clauses, enabling the government to bypass parliament in amending legislation, is one of many sources of controversy.

The EU–UK divorce proceedings opened in Brussels on 18 June, five days short of a year since the referendum. British civil servants have prepared intensively for a career-defining test. Among politicians, there is little sign of there being any there there. For a year, May has inhabited the safe space of platitude, while the showmen to whom she gave the foreign policy, Brexit and trade portfolios — Boris Johnson, David Davis and Liam Fox — have provided only billows of bluster.

There are excuses. Zero preparation for Brexit before the referendum meant that everything, including Davis’s and Fox’s new departments, started from scratch. A vacuum of expertise had to be filled, even more when Ivan Rogers, Britain’s ambassador to the EU, resigned in January with a subtle, stinging valedictory. DExEU (the department for exiting the European Union), headed by the well-regarded Oliver Robbins, now has 500 staff. Post-referendum paralysis, party divisions, parliamentary wrangles and legal cases sucked any outward-facing energy, underlining the impossibility of an inclusive position vis-à-vis the EU. Nor was the problem confined to Theresa May and the Tories: Brexitannia was sundered in many directions at once.

A difficult negotiation

By contrast, the EU presented a facade of serene implacability. It quarantined the British file from the rest of its operations to forestall any contaminating disunion and optimise its steerage of the process. Brussels’s conscious uncoupling skewered its soon-to-be-ex with a pitiless coded message: it’s not mature and together we, it’s neurotic and tousled you. That was embodied in its Franco-German negotiating duo, the lofty Michel Barnier and the zealous controller Martin Selmayr, cabinet chief of the bibulous European Commission president, Jean-Claude Juncker.

Such asymmetry guaranteed early spats, as when a self-serving depiction of British dimness in the Frankfurter Allgemeine Sonntagszeitung riled the still imperious May into donning the mantle of Margaret Thatcher (who, launching her 1993 memoirs in London during her late, Sunset Boulevard phase, gave the young Selmayr a formative glimpse of visceral Conservative Euroscepticism).

Two Brussels meetings since May’s chastening election, the most recent on 17 July, featured longer jousts over the extensive “withdrawal dossiers.” The EU wants three of them resolved by late October — those covering Britain’s divorce payment, citizens’ rights on both sides, and the question of Ireland’s border to be — before moving to a second phase of talks on tougher issues of trade and future relationships.

Calculations by the Bruegel think tank and sleuthing by the Financial Times’s Alex Barker conclude that Brussels’s likely overall demand will be in the range of €42 billion to €75 billion (A$62 billion to A$110 billion). London is refusing to commit, although it is reportedly prepared to offer up to €40 billion as part of a wider deal, including trade. From 14 August it is also scheduled to begin releasing position papers, the first two on the related issues of a transitional customs union and Northern Ireland.

The role of the European Court of Justice, the EU’s supreme court, is another major obstacle. The UK is depicting freedom from its jurisdiction as a “red line.” Brussels, already unhappy with an offer of “settled status” to the EU’s UK-based citizens involving a derogation of current rights, wants the court to continue as their guarantor after Brexit. The question of who regulates, with its implications for alignment or divergence in areas where the regimes draw apart, will come up again and again in the negotiating process. A recent Institute for Government report makes clear that regulation is Brexit’s viscera.

Driving to extremes? Brexit coordinator Guy Verhofstadt (in shirtsleeves). European Business Summit

The third bout is set for 28 August. Barnier warns (“the clock is ticking”) that the second phase of talks might need to be pushed back to December. Other members of his team, such as Sabine Weyand, are disdainful of British delays or inefficiency. The European parliament’s Brexit coordinator, Belgian MEP Guy Verhofstadt, is a bellicose Euro-nationalist who loves goading the Brits (and plays the role of Nigel Farage’s covert ally in driving so many moderate people closer to the extremes).

Hard as it is for many naturally pro-EU remainers in Britain to begin to acknowledge, those on the EU side of the table are themselves free neither of sectional interests nor of prejudices, nor even of simple ignorance. That’s why so many prefer not to look, and instead download (or displace) all their scorn onto domestic enemies. Its fanatical proponents are always the worst enemies of this or any other half-decent cause.

A cabinet disarrayed

Most British leaders came to cherish the country’s “awkward partner” status in the EU. Many influences helped entrench it: convenient role-play, domestic party politics, an anti-EU press. Not least, ideas can acquire credence merely by boring repetition. The larger truth, which fanatics will never admit, is that the UK has largely been a constructive member and a positive influence on the EU.

But Brexit? No. So far, the manner of its leaving has been all indignity for Britain — until mid July, that is, and promising hints of an outbreak of reason in London. Even if these were soon overtaken by summer madness, a couple of scattered seeds might yet bud.

After months of distress signals from neglected business organisations, a joint government–business council was at last convened, with fortnightly meetings planned. Cabinet spats then paused long enough for murmured agreement with Philip Hammond’s recommendation of a transitional post-Brexit phase — perhaps lasting three years, until 2022 — to avert the dangers of a “cliff-edge” departure. Given Davis’s Brexiteer credentials, his alignment with Hammond on this point seemed a noteworthy step up, and support from arch-leaver Michael Gove was also notable.

Home secretary Amber Rudd, once an outspoken remainer, then asked independent government advisers to “design a future immigration system” that “allows us to achieve sustainable levels of net migration.” This seemed anodyne, especially as the report wouldn’t be delivered until late 2018, but simultaneous news of more east-central Europeans returning to their homelands after years in Britain, and of labour shortages in eastern England’s busy agricultural sector, gave Rudd’s commission a timely air.

These undramatic proposals (in the jargon, “soft Brexit”) heartened many who, like Hammond and Rudd, voted to remain in the EU and want to avoid it becoming the iceberg to the UK’s SS Titanic. But — here comes the madness — they instantly roused the ire of cabinet rivals and their press allies devoted to a “hard Brexit.” “Transitional,” they feared, might become code for “you’ll never leave”: the Hotel California or Royston Vasey option. Reducing immigrant numbers by ending the EU’s mandatory freedom of movement is the whole point of Brexit: the people want action, said the critics, not experts’ waffle. And if free movement continued through the transition period, a principal benefit of being outside the EU would recede even further.

Spats, leaks and rival briefings erupted on every front, most surreally when international trade secretary Liam Fox, ideologist of market and the Anglosphere, found himself in Washington embroiled in defence of the US poultry industry while boosting the chances of a US–UK free-trade agreement. This Fox among the chickens in the land of Trump was perfect silly-season fodder, but the sheer vainglory on display was more serious.

A week earlier, Fox had made the remarkable claim that a post-Brexit trade deal between Britain and the EU would be “one of the easiest in human history.” The Sunday Times’s David Smith, pre-eminent economics commentator in a rich field, wrote on 30 July that “business leaders do not know whether to laugh or cry.” And in a rare thrust, which makes it all the more telling, Smith said of the pushback against Hammond, “the chancellor is up against bonkers elements of the Tory party and the media.”

Hammond evoked more paroxysms when a 28 July interview with Le Monde made its way across the English Channel. Referring to tax rates and state expenditure in relation to GDP, he said that Britain’s economic model will continue to be “fundamentally European.” It marked a shift from his own earlier view that EU hostility might push Britain towards becoming a low-tax mecca.

A further scene change arrived on 13 August with a joint Sunday Telegraph article by Fox and Hammond. They agreed that Britain will depart the EU single market and customs union in 2019, at the start of any transitional deal. The piece’s tone, timing (the eve of May’s return from holiday) and placement (the house journal of the Tory right) signal a jarring compromise, but no end to the feuding.

That Brexit promises to reinvent Anglo-Britain as a global buccaneer, a view typically drenched in cloying sentimentality about this blessed plot, remains an article of faith for Fox, Boris Johnson (depending on his mood) and many other breezy Eurosceptics. To unbelievers, the remix of “Macau-on-the-Thames” with “Merrie England” is shameless. But it has considerable appeal in what the Europhile veteran Michael Heseltine in happier days called the Conservative Party’s erogenous zones.

A long civil war

Theresa May’s infirmity, the Conservatives’ election reverse, the chance of another election that Corbyn’s Labour could win, and Brexit’s overload — these ongoing spasms are reason enough for cabinet nervousness. Against the background of a generation of Tory disputes over European policy, though, they betray an incurable addiction.

Between 1990 and 2016, after all, “Europe” — as the source of the party’s derangement was then called — led to the downfall of three Tory prime ministers and helped keep three other Tory leaders from power. The moderniser, David Cameron, came nearest to performing a detox when, after the party’s triple defeats to Tony Blair, he told it to “stop banging on about Europe.”

It did, for a while, only for the craving to return. Of course, there are rational and historically literate arguments for leaving the EU. The formidable scholar Noel Malcolm, for example, draws on the principles of democracy and sovereignty to make the case, as does Robert Tombs, author of the outstanding The English and Their History. But what rendered “Europe” and now Brexit so enduringly harmful is that (amplifying David Smith’s point) a crackpot Tory right and its press allies have succeeded in turning the issue from a choice between legitimate political alternatives into a choleric crusade to defend the nation’s beleaguered identity and secure its manifold destiny.

Nothing has been more conducive to the spread of irrational fears and prejudices into every crevice of discussion of the European Union. The mindset’s latest symptom is viewing fellow Tories who seek nothing more than compromise over the terms of Brexit as heretics bent on sabotaging the people’s verdict. The long Conservative civil war is evidently far from finished, and could yet cast Brexit, as one of its spoils, into new territory.

A choice of futures

Where could that territory be? Nick Cohen, who is on the money about most things, anticipates that a cabinet resignee with a Brexit betrayal narrative will catalyse right-wing politics “with a vengeance.” The New Statesman’s astute Ed Smith, analysing “the Brexit plague,” writes that “the immediate future of British politics [is to] blame. When a new economic reality bites, there will be a lot of Brexit anger to be redirected.” Both, intriguingly, finger the tarnished but unsated Boris Johnson as the fitting carrier of this “virulent political malady.”

Those analyses are compelling because they follow Brexit’s internal logic and take its proponents seriously. Many other critics of the Tories and of Brexit, plausibly reading the election’s youthquake as a two-fingered rebuke to both, see their task in instrumental terms: primarily as an opportunity to stop or reverse. This diverse proto-coalition is invigorated by Brexit’s troubles on every front.

Its weighty voices include Tony Blair and his spinmeister Alastair Campbell, London’s mayor Sadiq Khan, the new Liberal Democrat leader Vince Cable, sundry Guardian and Financial Times columnists, the bravura New European newspaper, tweeters Bonnie Greer and A.C. Grayling, and the constitutionalist Vernon Bogdanor. The mechanics of change are uncertain: second referendum, issue-based election, rescind the divorce papers? But the calculation is that these could become less daunting if the Brexit process crashes and a frustrated public swerves in the right direction.

The problems go beyond mechanics, however, to political judgement and mentality. Some vocal anti-Brexiteers, excluding most of the above, risk replicating the flaws of their most vehement adversaries. In practice, that means appearing uncritical of the EU, patronising towards leavers, and selectively democratic. The actual criticisms are often unfair. But there are enough examples to make them adhesive.

At a deeper level, a widespread tone of aggrieved self-righteousness is almost de rigueur across the political spectrum. It is all the more harmful when it comes from those whose interest lies in persuading others towards a supposedly more enlightened view. The calamitous ex–Liberal Democrat leader Nick Clegg, now a mysteriously ubiquitous columnist, is the quintessential member of this blowback school.

In an article flaying Britain’s “superiority complex,” for example, Clegg describes an elevated and clubbable Berlin debate about Brexit and contrasts it with the raucous manners of the natives and their yellow press. How nasty the Brits are, how admirable the Germans!

Superiorism comes in many forms. Many in Britain who have, in Leszek Kolakowski’s term, “all [the] correct views on everything,” specialise in transferred or inverted superiorism. That helped Brexiteers win the contest. It would help make the post-contest unsalvageable. Such one-eyed remainers find it hard to avoid giving the impression that they want Brexit to become the “catastrophe,” the “disaster,” the “calamity,” the “car crash,” the “nightmare” they incessantly predict, so sweet will vindication be. This is not necessarily to their advantage.

In any event, most polls still show a roughly even divide on the principle of Brexit, but over two-thirds agreement that it should happen. A survey by LSE/Oxford researchers, published on 11 August, concludes that “the public — both Leave and Remain voters — are willing to make trade-offs,” while also being “almost completely indifferent over some aspects of the negotiations.” With a benevolent squint, these findings suggest the potential of a submerged consensus-minded majority that might endorse the putative “Norway for now” option.

The reference is to the European Economic Area, or EEA, which affiliates Norway, Iceland and Liechtenstein to the EU. Those three states pay to trade as part of the single market, are members of Europe’s customs union, and are able to negotiate free-trade deals elsewhere. They are also exempt from EU foreign, justice and agricultural policies. More onerous from a British viewpoint, they are rule-takers in respect of EU decisions, and — in accordance with the single market’s rules — embrace free movement of labour as well as of trade, capital and services.

In principle, however, Britain might secure a bespoke deal that distinguished the labour market from cross-border settlement as a whole. “A bit more immigration control and a bit less single market,” in the words of Rupert Harrison, who advised ex-chancellor George Osborne, might help the “EEA-minus” medicine go down. Moreover, oversight by the European Free Trade Association court (the EFTA being made up of the three EEA states plus Switzerland, which has its own relationship with Brussels) could, as even European Court of Justice president Koen Lenaerts suggested on 8 August, meet London’s desire to avoid the court’s regulation.

The EEA (or “EEA-minus”) model is favoured by some concerned academics and journalists. Among them are Richard Whitman of the University of Kent, who describes it in “safe harbour” terms, and two sharp, maverick Eurosceptics, the Telegraph’s Ambrose Evans-Pritchard and the Financial Times’s Wolfgang Munchau. A joint report by the Cambridge law academics Catherine Barnard and Amy Ludlow, and The UK in a Changing Europe project, published in May 2017, also detected popular support for, in Barnard’s words, this “acceptable compromise.”

The EEA — no panacea, but then there isn’t one — might be the apt interim place for a “sceptical but pragmatic” nation while it works out its next move. (This characterisation of people’s attitudes to Europe was made by Matthew Goodwin and Caitlin Milazzo in a Chatham House report in December 2015.) The prerequisite of a UK sidestep towards the EEA, however, is serious political traction. So far that’s missing.

All this, and Brexit too

The mere absence of panaceas is the least of it. The Brexit maze was made even more complex by twelve months of political nullity. As a result, Brexit is no longer the thing it was. It has become enveloped in all the pains it was meant to transcend. In fact, it now owns them.

Between referendum and election was a locust year dominated by Brexit’s primary colours. All other aspects of British life were cast into shades of grey. Yet the country’s neuroses were still throbbing away. Now, as hard choices approach, everything is being mashed up. With a nod to Gillian Tett, the message of Brexit is “no silo.”

In better times that might become a plus. In troubled ones, discrete threads can combine into a negative feedback loop. Before the referendum, Britain was living with steep and unavoidable problems. The highest-profile of these — its underperforming economy, possible break-up, and global status — were clearly linked. But short of any going critical, each could be managed separately. Brexit was a big new demand on the state to do its work at the highest level. It has proved, or looks, incapable. That has had a numbing effect.

Martin Wolf, the Financial Times’s magisterial economics columnist, writes of the “spectacular mess [Britain] is making of Brexit”: “The UK has become so ludicrous because the issue of the EU is so deeply felt by a significant part of the body politic. The Brexiters are the Jacobins of UK politics. Their ideological intensity has devastated the Conservative Party and reduced British politics to its present shambles. There is, as a result, neither a comfortable exit from Brexit nor a plausible way of managing it smoothly.”

There was always a risk of such incapacity, even with better government and clear negotiating lines after the referendum. After all, the desire to “take back control” (the leavers’ winning slogan) was also a confession of weakness. Brexit meant two arduous negotiating tasks: departure from the world’s largest trading bloc and political association of 513 million people, and building a new portfolio of relationships. It was an invitation to exposure of Britain’s vulnerabilities. All the while there would be other actors on the stage, seeking to advance their own interests. The possibility of overstretch was large, the margin of serious error small. The whole prospect exemplified the dictum of Robert Cooper, a former senior British and European diplomat, that in the postmodern world foreign policy is domestic policy. And, of course, vice versa.

A strong argument against voting to leave the EU in 2016 was pragmatic: that the move would prove a costly distraction from more immediate and essential priorities. EU membership in most respects did nothing to prevent this focus, if the political will was there. The argument also had an absurdist subtext. The British state already struggles to pull off even relatively minor individual tasks: build a power station, plan a railway line, organise flood defences or enforce fire regulations. How could it cope with Brexit too? When the answer came it was suitably Beckettian: try again, fail better, on a vaster scale.

A floating economy

Brexit is full of unknown unknowns. But clearly, it is now more than a conduit for or even an exacerbating factor in the UK’s pre-existing stresses. It has adopted them as its own. Illustration lies in those three foremost areas of British statecraft, if such a thing can be said still to exist.

The first is the economy, which undergirds all else. Central in the Brexit debate, there are tons of impressive analysis and reports on every aspect: its impact on growth, investment, employment, immigration, regulation, universities, finance and industry. Day by day, every relevant morsel of news is conscripted by rival camps to bolster their purpose, in what the Telegraph’s clear-eyed Jeremy Warner calls the “Great British Brexit Soap.”

So the transfer of financial or legal staff from London to Frankfurt, Dublin, Amsterdam or Paris is ominous, but inward investment from BMW or Amazon is a vote of confidence. Malcolm Turnbull’s friendly noises over a free-trade deal represent hands across the ocean, Canberra’s warnings about a tighter post-Brexit visa regime in the UK less so. The war for interpretation of mixed evidence is relentless.

Mixed messages: Malcolm Turnbull with prime minister Theresa May in London last month. Number 10

Such evidence is in the overview as well as the granular day-to-day detail. Independently of Brexit, and greatly compressing a complex story to make the point, some longer-term economic trends are inexorable. Britain is living way beyond its means. Item one is a productivity and skills-plus-training crisis (for once the overused word is appropriate), followed by vast public and household debt (in the latter instance, alongside minuscule savings ratios). Gross public debt, at under £0.5 trillion (A$820 billion), was 38 per cent of GDP in 2005. It had doubled by 2010, and even with post-crash spending cuts was 79.5 per cent in April 2017.

There are also huge trading deficits, continuous since 1998, even when offset by a surplus in services. A currency weakened by 15 per cent since a year ago has made negligible difference. An IMF report published in July worries that the UK’s current account deficit of 4.4 per cent is the biggest of the twenty-eight major world economies (Australia’s is 2.6 per cent). A contracting tax base chained to a convoluted system, and a housing emergency also demand attention.

All this is in the context of the exchequer’s escalating commitments on public pensions, health and welfare, partly reflecting demographic and social trends. In fiscal year 2018, these three top areas account for £522 billion (A$861 billion) of the £814 billion (A$1342 billion) total public spend. Interest on public debt, at £57 billion (A$94 billion), is bigger than the entire annual British defence or transport budget.

In addition, cyclical conditions are turning sour: growth (0.3 per cent in April–June 2017) is at a five-year low, inflation is rising and the country faces a possible recession — two consecutive quarters of falling GDP — this year. Recent growth has been powered by consumer spending, often from a position of indebtedness, but this is receding as a decade’s static or falling real wages really bite. A stabilising Brexit agreement is thus essential, both to end business uncertainties over planning and investment and, if and when the political will becomes available, to clear the ground for much needed remedial work.

Whether that will happen before or after a reprise of the 2007–09 moment, which only capital inflows and market confidence now stand against, remains to be seen. Exactly a decade since that crisis began, with interest rates at zero and credit afloat following years of the money pump, no painless policy options are left.

Alex Brazier of the Bank of England’s financial policy committee talks of “a spiral of complacency” among lenders, instancing that outstanding car and credit card loans increased by 10 per cent in 2016–17, against a 1.5 per cent rise in household incomes. A perilous merry-go-round is back.

It’s true that these conditions arose during the years of EU membership, and that Brexit was offered as an opening to renewal. Apart from the fall in the currency, predictions of an immediate economic impact didn’t materialise. But neither will withdrawal from the EU bring automatic improvement. Substantial economic benefits are but a leap of faith, many years away at best, and always dependent to a great degree on external conditions.

The necessary deliberative strategic reorientation would require an intelligent and agile state as well as a dynamic economy. But the existing British state, while adept at using the available tools to steer the economy, is simply not customised for strategic leadership. Without institutional and cultural-psychological reform at home, the economy, before and after Brexit, will continue to flirt with another “Minsky moment.”

A constricting state

The second stress that Brexit now owns is the tension in the state’s political authority. This has already come to be more or less permanently negotiated within its own realm. Since 1997, Britain has modified its centralising impulses with an archipelago of devolved institutions, as well as a Supreme Court, without surrendering the besieged doctrine of parliamentary sovereignty. That doctrine has become more attenuated as conflict between the centre and sub-national polities has become the norm.

Scotland has been the epicentre of that conflict, as the independence referendum of 2014 showed. In this respect, Brexit’s role in Scotland has had a touch of paradox. Scots voters backed remaining in the EU by 62 to 38 per cent. The Scottish National Party leader and first minister Nicola Sturgeon sought to use the result to push for a fresh referendum, but her clumsy efforts backfired.

The election success of kickboxer Ruth Davidson’s Conservatives in June then delivered a profound, if not a knockout, blow to the SNP. Her party’s twelve-seat gain also proved crucial to Theresa May’s ability to form a government “down south.” Brexit had been widely expected to boost the SNP; instead, popular frustrations with the record of the party, now in its eleventh year in government, and its leader mattered more to voters.

This may not last. Brexit presents the SNP with copious opportunities to sharpen ill-feeling between London and Edinburgh, not least over the distribution of powers repatriated from Brussels. What critics call the party’s “grievance machine” can indeed make monsters from midges. Setbacks are to the party mere detours in its long march, which longer-term trends arguably favour. Scottish political cycles are also shortening. A second referendum is likely before the next Scottish parliament election in 2021, when the SNP would risk losing office. For the UK’s enfeebled statecraft, Scottish independence is now an ever-present shadow.

Brexit jolted the Irish Republic into an unsought role in the UK’s constitutional strains. Ireland’s modern success owed much to its ability to synergise strong relationships with Britain and its other EU partners. Dublin and London’s joint work in settling Northern Ireland’s conflict via power-sharing and security guarantees had also made the island’s 300-mile physical border near irrelevant. Now the next-door neighbour was going rogue, and all bets were off.

The UK’s withdrawal from the EU would turn the border into an EU one as well, complicating Dublin’s trade regime and likely imposing new customs controls and tariff costs. London claims that technology can guarantee “frictionless” trade, which looks utopian on the narrow ground (and from a government that specialises in IT disasters). A “hard” frontier, with its checks and delays, its migrant panics and security dramas, would nurture fears of renewed political tensions. And Ireland, as one of the smaller states inside the EU, would also be without Britain’s often valuable support in its chambers.

In Northern Ireland, the UK’s decision has refuelled arguments on Irish unification, in particular by the anti-Brexit nationalists for Sinn Féin. This party and the Democratic Unionist Party, or DUP, have become hegemonic among, respectively, the territory’s Catholic and Protestant communities. In turn, those arguments strengthen the DUP’s will to defend the north’s status inside the UK. The DUP–Conservative partnership in Westminster, which the Tories need to survive in government, reinforces the core Sinn Féin–DUP opposition, making Belfast’s already chilled politics even harder to unfreeze.

Ireland’s new taoiseach, Leo Varadkar, has raised the stakes by proposing that travellers be checked at airports and seaports. In an artful speech at Queen’s University, Belfast, on 4 August (“At a time when Brexit threatens to drive a wedge between north and south we need to build more bridges and fewer borders”), he followed up by suggesting a new EU–UK customs union or a “deep FTA” as possible options. Both displease nervous unionists, who see the first as delegitimising the north by making the Irish Sea in effect the prior inter-state border. Ireland’s new foreign minister, Simon Coveney, meanwhile, is proving more amenable than his predecessor to Sinn Féin, which has been talking up its readiness to enter a future coalition government.

A new parliamentary report in Dublin envisages a pan-Ireland poll on unification within a decade. Its lead author, Fianna Fáil senator Mark Daly, says this is “the main aim of the Irish state.” Thus, Brexit is pulling Irish politics into a reciprocally less friendly posture towards the UK, while understandably fuelling all-Ireland political sentiments that are also, in the northern context, potentially divisive. This “self-inflicted blow,” writes the historian Roy Foster, “will have powerful reverberations on the island of Ireland.”

Brexit is all the more regrettable given that the relationship between Dublin and London in this decade had, thanks to skilled diplomacy on both sides, been the warmest since the country secured its independence in 1922. That phase is now over. This is Brexit’s sole definitive achievement so far, and a melancholy one.

Running on empty

The third area of stress now owned by Brexit is the UK’s global status and influence. In this regard, the vote was seen almost everywhere as negative. The utter dismay with which Britain’s closest European friends greeted the outcome conveyed the sense of a historic impairment. A “bewildering act of self-harm,” said an editorial the next day in the Irish Times, the cultivated voice of Ireland’s establishment. This “shocking decision will leave the kingdom neither independent nor united. It will be poorer, more isolated and less influential. Our neighbours have inflicted a deep wound on their country, economically and politically.”

Mark Rutte, centre-right prime minister of the Netherlands, which then held the EU’s rotating presidency, was bluntly solicitous in a very Dutch way: “England has collapsed politically, monetarily, constitutionally and economically. It is not reasonable to demand from them to trigger Article 50 [which would activate the referendum vote].” A country in chaos needed time to regain its footing, he said.

Such reactions, with varying registers of scorn, bewilderment, pity and satire, echoed across the continent and beyond. Those clapping were all the wrong people. A worse humiliation was that Donald Trump’s victory forever associated the two events, making Brexit contributory as well as premonitory. That Europe went on to survive populist scares and took a centrist turn on the back of an economic upswing drew a benign contrast with sunken Anglo-America, though counter-trends in Hungary and Poland cautioned against over-simplification.

The UK’s self-esteem, for all its prideful extravagances, was grounded in its central presence in world institutions and affairs, as co-guarantor of a post-1945 order now severely tested by a range of forces: economic sclerosis, “easternisation,” authoritarianism, populism and cyber-crime. The decades after the second world war were frequently portrayed as a story of loss-of-empire-without-finding-a-role. But in war’s afterglow, and benefiting from the empire that had undergirded its wealth, Britain managed to hold on to its coveted place at the “top table.”

Something always seemed to turn up: nuclear weapons, NATO, Europe itself, oil, Thatcher–Reagan, the Big Bang, privatisation, the Soviet implosion, Tony Blair. In the 1990s, the notion that Britain’s international alliances enabled it to “punch above its weight” was the simulacrum of an illusion-free realism. The post-2001 years recharged that until the batteries ran out. Now the UK is running on empty.

Throughout, Europe was at the centre of often-anguished partisan debate about Britain’s place in the world. This took continuous new forms with each decade, and would have continued to do so, Brexit or no Brexit. In the event, the decision revealed Britain, in the eyes of most of the world and half the UK, to be more an agent of instability than its prophylactic. For all the buzz about “global Britain,” it appeared to show the English-British turning inward in a triple nativist rejection: of internationalism, of a key geopolitical pillar, and of the country’s own best self. The reputational damage of such perceptions matters even if reality proves more nuanced.

Status and influence can seem nebulous, rungs on an imaginary ladder. A global Ipsos/MORI survey in July shows that 57 per cent consider Britain a good influence in the world, both its figure and ranking unchanged from a year ago. Another, by Jonathan Lis, tracks the exclusion of the UK from the EU’s foreign-policy committees and policy forums, and the loss of expertise, access and capacity this entails. Equally, the waning might be perceptible in the less overt realms of soft power: a cancelled contract, a diplomatic snub, a visa refusal, a liberating new tone of contempt, a sympathetic question on the continent about where your country is going. (Admittedly these can also go another way, not only in Trumpland.)

A more public expression comes in international media commentary, with British voices well represented. The decrepit lion’s withdrawing roar is worked into a rich stew where callous officialdom, social divides, anti-immigrant incidents and racist attacks were seasoned with notions of imperial nostalgia and white Britannia’s retreat from modernity. Out of the EU, out of mind, out of depth, out of time: Brexit mashes every silo into a generic, unavoidably tendentious likeness of a country going forward into the past.

The UK continues to keep up appearances on the international stage: summits, statements, state occasions. Military support to NATO in the Baltics, backing for the coalition against Islamic State, intelligence cooperation with “Five Eyes” colleagues — all these gain importance in Brexit’s wake. But the larger story is a shrinking of defence capacity and consequent ability to exert influence. Russia’s continual probing of Britain’s air defences and its nuclear submarine facilities, and in a lesser way Spain’s poking of Gibraltar, are blips on this radar.

In a parallel universe, the first of two gigantic aircraft-carriers was launched on 27 June, the day after the deal with the DUP was signed in Downing Street. Built across a decade in the country’s Rosyth shipyard, by serendipity in the constituency of Gordon Brown, the Scottish-British prime minister who ordered them, its intention was twofold: to project — what else? — “global reach,” but also to bind a semi-detached Scotland closer to the union.

In both strategic and cost terms (at least £6.2 billion, or A$10.2 billion, for the vessels alone), the ships seem ever more an expensive folly. Before and after Brexit, from HMS Queen Elizabeth to the DUP agreement, much of London’s statecraft now comes down to stopping domestic policy from becoming foreign policy.

A last twirl

Again, no one knows where Brexitannia is going. It’s not unimaginable that a messy and costly adjustment to Brexit, in combination with an ill-starred coalescing of other ingredients — another financial bust, renascent nationalism in Scotland, reorientation in Northern Ireland, economic hardship and social disorder, terrorism and cyberattack — will produce critical overstretch during the next decade. Britain then faces a rare Staatskrise (regime or constitutional crisis). Such an outcome might have happened anyway. But Brexit will forever own it, too. The Brits would at last be German, and Nick Clegg doubly happy.

More immediately, a win for Angela Merkel in Germany’s 24 September election might give her critical space to take serious politics into the Brexit process. She might well have the support of the centrist Social Democrat foreign minister, Sigmar Gabriel, who hints at a less desiccated approach to Britain. Flexibility on the EU mandate might follow, to be matched from the British side. In short order, the light at the end of the tunnel could prove, after all, not to be the oncoming train.

This may prove to rest on a “lazy assumption,” as the Telegraph’s Juliet Samuel writes, but let’s pursue the political and personal logic. First, the EU’s impressive economic recovery is not secure, nor yet matched by a political one, despite Emmanuel Macron’s relieving victory. Witness the strains between Rome and Paris (and Rome and the EU more widely) regarding the latter’s lack of support over Italy’s huge influx of migrants. Hungary and Poland’s right-wing direction, the latter now raising war reparations with Berlin, needs artful diplomacy. Putin’s malign influence grows. Merkel understands all this as European Commission president Juncker does not. (A friendly interview in Politico proves revealing: the man who has a paternal, “caring” relationship with Hungary’s authoritarian Viktor Orbán spares for Poland the single, smug remark that it “will be more lonely after Brexit.”)

Merkel also grasps that her humane and complicated welcome of almost a million migrants in 2015 made Brexit more likely. Her opponent in the election, Martin Schulz, is Juncker’s crony: a notorious job-fixing deal in 2012–14 secured their respective positions as head of the European Parliament and European Commission. Schulz also handed motor-mouth Verhofstadt his coveted Brexit coordinator job without a plenary vote, in 2016. David Cameron, to his credit, broke with precedent in insisting on a vote on Juncker’s promotion in 2014, and was one of only two national leaders to oppose it. (Orbán was the other.) That rankled with Juncker and his hitman Selmayr, whom Merkel guardedly distrusts. They are quite explicit that Britain must suffer and be losers from Brexit. Selmayr approvingly tweets, and Weyand retweets, Juncker’s self-satisfied interview, adding a tiny gloat: “End March 2019: UK = 3rd country.”

Merkel knows too that the EU’s likely future without the UK is not so easeful as it is sometimes depicted. In any event, it is already having to become more concentric and accommodative of distinct national preferences. The election win, if clinched, will be her last. A Brexit deal that further improved Europe’s political dynamic — for which she would need Macron’s buy-in — would emulate the achievement of her mentor Helmut Kohl. Contingency once more outfoxes destiny.

Some EU officials are reported to fear that behind the British side’s shocking unpreparedness for the talks lies a cunning plan of some kind. In the above scenario, it’s not a Blackadder-style one but rather Waiting for Angela. Remember, if you are Britain, something always seems to turn up.

Two big preconditions would have to be met: creative statecraft all round, and headbangers in London and Brussels marginalised. In normal times, they would be near impossible to achieve. But these are absurd times: when, as a wise commentator once wrote, imagination is the only weapon in the war against reality.

The vote to leave the EU was also a thwarted flight from confinement, a leap towards the stars — and into the unknown. Now everyone’s at it, and no wonder. Living with Brexit and debt, May and Corbyn, and looking to the grim years that lie ahead, in a diminished, damaged and divided country, we are all the man in that Czechoslovakian joke.

Read next

1889 words

Entitled to vote? Then you should be entitled to run

15 August 2017

From the archive | The High Court keeps fertilising the thicket of rules disqualifying candidates. Simplification is long overdue

Right:

Former senator Bob Day’s legal problems raise issues about the rules governing who can stand for office. AAP Image

Former senator Bob Day’s legal problems raise issues about the rules governing who can stand for office. AAP Image