Lord Hannan of Kingsclere is a Conservative peer, writer and columnist. He was a Conservative MEP from 1999 to 2020, and is now President of the Initiative for Free Trade.
On Monday, I picked up the Government’s new paper, The Benefits of Brexit: How the UK is taking advantage of leaving the EU, hoping to be cheered up. The point of leaving the EU, after all, was to remove constraints, allowing us to make different and better choices. Two years after Brexit, and a year after the end of the transition, how are we doing?
Overall, I’m afraid, the document is thin, watery, tasteless gruel. Yes, there are tasty lumps here and there. Replacing the Common Agricultural Policy with a subsidy regime that rewards rural stewardship rather than food production is in the interests of farmers, consumers and the countryside.
Taking back control over our fishing grounds is likewise in the interests of both fishermen and fish. We’ve tapped some irritating pebbles from our shoes – the tampon tax, EU passports, restrictions on Imperial measures.
But most of the gains listed here are aspirational. Yes, we could have a better alternative to the GDPR rules. Yes, we could lead the world in AI. Yes, we could be more open to trade. Yes, we could scrap the most burdensome aspects Solvency II, MiFID II and the rest of the EU’s financial services apparatus. But, so far, we haven’t.
Here are 100 pages of civil servantese. I don’t just mean that the document was literally written by officials; I mean its worldview is that of Whitehall. Again and again, we see listed as “gains” such things as a new regulatory regime, a new agency or a new subsidy mechanism. The idea that leaving the EU might mean fewer regulations – a major theme of Vote Leave, which went into granular detail in its million-word manifesto Change or Go, has been forgotten.
All talk of cheaper energy is gone. It is now clear that, outside the EU, Britain will go beyond what it was obliged to do as a member. So has any notion of a less rigid labour market: BEIS has halted even the moderate plans to apply the Working Time Directive in the more flexible way that several EU members do.
Regulations that ran into universal opposition when they were imposed are being left in place because existing producers, having assimilated the compliance costs, don’t want new entrants to avoid them. The idea that the Government should act in the interest of the nation as a whole, making things cheaper for consumers and thus boosting growth, has been sacrificed to the civil service obsession with favoured client groups – or, as they are known in the jargon, “stakeholders”.
Why is a government elected to deliver Brexit being so timid? Is it Boris Johnson’s fault? Should we blame his ministers? Or the Blob? Let’s consider the options.
A charge commonly levelled at the PM is that he lacks staying power, that he tosses out dazzling ideas only to back away when he realises that they involve short-term unpopularity. Even when they are popular, runs the argument, he often loses interest, allowing them to sink into the quicksand of Whitehall inertia.
Plainly some of that has been going on here. For example, the Trade Remedies Authority, created to assess whether existing tariffs or other barriers could be justified, gave its first judgment on the steel duties that Brussels had imposed in retaliation against Donald Trump. It called for most of them to be repealed.
The PM overruled it, seemingly at the behest of some MPs in steel-producing constituencies. Having made the finest defence of free trade by any major leader as recently as February 2020, he thus now has a 100 per cent record of intervening from a protectionist direction. Indeed, protectionism is suddenly being presented as a benefit of Brexit: “We created the Trade Remedies Authority to help defend UK economic interests by investigating complaints from UK industries.”
Britain’s approach to trade has been almost as prone to producer capture as the EU’s. Even when dealing with countries as well-disposed as Australia and New Zealand, we have dragged our feet (almost all the delays were on the British side). How much more mercantilist will we be when it comes to India or Mexico?
Then again, the more specific the problems, the harder it is to blame them all on Number 10. The Government is crowing about freeports, for example – and it is certainly true that freeports can create growth in ways that were illegal in the EU. But only if they have meaningful powers, especially when it comes to lowering or scrapping taxes – something that Treasury officials appear to have blocked.
Brexit gave us the chance to set aside some of the EU’s more Luddite rules on gene editing. Again, the intentions seemed to be there. Ministers fought the Blob to get Matt Ridley appointed to the relevant advisory committee, which duly proposed sensible ways in which we could seize the economic and environmental opportunities. Nothing happened. After trying several times to turn his recommendations into policy, Ridley quit politics – a real loss to the nation.
Most disappointing of all has been the failure to deregulate financial services. While we were in the EU, we voted against several pointless new rules, some of which seemed expressly designed to drive business from London to Paris and Frankfurt. Often, we lost. But, now that we are free to repeal these laws, we seem reluctant to do so – even though, by denying us equivalence, the EU has removed any incentive to stick to its standards.
Whenever you push them, Treasury ministers say that it’s all in hand, that they’re conducting a review and something or other and mimblewimble. But, more than two years after winning an 80-seat majority, the Government has done nothing. Indeed, there is a real prospect that the EU will remove the more burdensome aspects of the Solvency II regime before Britain does.
I’m afraid ministers must accept collective responsibility here. In theory, they want deregulation. In practice, they don’t want it in their own departments. And they don’t want it because change – especially change that pits them against their officials – is hard work and leads to bad short-term headlines.
Which brings us to the real problem. The only way to deliver an economically liberal agenda is to take on the Blob – not just civil servants and quangos, but all the associated corporatists and rent-seekers and CBI bureaucrats who have attached themselves to the status quo. That requires not just courage but time, patience and single-mindedness.
Dominic Cummings was supposedly brought in to get on top of the Blob. He failed. Perhaps he was better at stating the problem than at tackling it. Perhaps he lacked support. Perhaps he was overtaken by the coronavirus. Whatever the explanation, I fear the moment has passed.
How telling that this administration – this supposedly Brexit-focused, anti-nanny-state, freedom-loving administration – has dropped the one-in-one-out rule on regulations that David Cameron and Theresa May followed. Apparently it was deemed to be incompatible with the net zero agenda.
We paid a high price during the exit negotiations for the right to diverge from EU standards. I was one of those who argued for moderation – for accepting a Swiss-type deal so as to avoid many of the rows we went on to face over Northern Ireland.
I lost that argument and we went for absolute regulatory freedom. OK, fine: I’m happy to get with the programme. But it is idiotic to pay that price and then not use the freedoms it bought. There was recently a time when almost every Conservative MP understood that. Where have they all gone?