Article Published December 15th, 2020
One relief from the ongoing general uncertainty surrounding the ongoing negotiations between the European Union and the United Kingdom on a post-Brexit Free Trade Agreement has been to study specifics, such as its likely regional impact. In pursuit of this I recently participated, by video, in an informal conference on the prospects for Liverpool and the wider North-West.
This afforded three interesting fields for reflection. The first was the anticipated high probability, even if there is a deal of the sort now under discussion, that Airbus Industrie, the pan-European aircraft manufacturer, with its principal United Kingdom base at Broughton, near Chester, will remove its production operations to inside the European Union, and thus some 14,000 direct and some 110,000 supply-chain jobs, most of them skilled and well-paid. The second was an entertaining, and persuasive, thought experiment of the transference of the UK capital from London to Liverpool, or more precisely to a new super, “smart” conurbation combining Liverpool and Manchester, as a muscular method of “levelling up” the North with the South of England. The third was the reflexions of a veteran former member of Liverpool City Council during the notorious era of Mr Derek Hatton, on the parallels between the grip of Militant over the Labour Party then, with the grip of the European Research Group over the Conservative Party today.
The first insight reveals why a most significant pillar supporting the assumptions made by the Brexiteers in their negotiations with the EU – that because the Europeans run a substantial trade surplus with the UK, they need a free trade deal more than us – was unsound. The UK will simply never buy enough Airbus aircraft to equal the value of all those high-technology jobs to the economies of Munich or Barcelona (apparently the front runners to take the wing manufacturing currently done at Broughton and Filton). Brexit, by forcing the onshoring to the Single Market of whole supply chains, represents a significant gain to the EU, for which no realistic amount of regulatory under-cutting or exchange rate devaluation will be capable of compensating.
The second demonstrates that only really dramatic measures can hope to make any real impact upon the deep North-South divide in England. As the consequences of Brexit unfold, the south of England will be hit by the loss of earning capacity in London and its commuter hinterland from the progressive erosion of the capital’s status as an international financial services centre. But the North will be hit worse, with wide losses in its manufacturing capacity, exacerbated by the greater inflexibility of its labour market and the national fiscal squeeze from lower overall tax revenues. The North-South divide in England undoubtedly played a significant part in the outcome of the 2016 referendum, which was at least as much a cry of northern rage against the undoubted indifference of London as it was against the imaginary interference of Brussels. But the notion that any government genuinely committed to ameliorating the problem would regard Brexit as part of the solution is complete fantasy. Brexit will make it worse.
The third came from recalling Lord Kinnock’s seminal speech to the 1985 Labour Party Conference, in which he condemned Mr Hatton’s conduct in Liverpool with the ringing conclusion:
“I’ll tell you what happens with impossible promises. You start with far-fetched resolutions. They are then pickled into a rigid dogma, a code, and you go through the years sticking to that out-dated, misplaced, irrelevant to the real needs, and you end in the grotesque chaos of a Labour council, a Labour council, hiring taxis to scuttle round its city handing out redundancy notices to its own workers.”
It is impossible not to see a parallel with today’s grotesque chaos of a Conservative government, a Conservative government, urging businesses to consult a web site on the preparations they must make for the fundamental change to their operations entailed by its Brexit policy, the final form of which it has so far failed to set, less than a fortnight before those changes are due to come into effect.
Of course, it was not really Kinnock’s stand that caused the decisive defeat of Militant, but the fall of the Berlin Wall. Which brings me to another relief I have found for the present impasse over Europe (and indeed perhaps even more the continuing Covid crisis): re-reading “Im Westen nichts Neues”, Erich Maria Remarque’s classic First World War novel, its title, literally “In the West nothing new”, taken from the standard official German High Command communiques from the long periods of inactivity and immobility which characterised the conflict on that front, in contrast to the more active and mobile battles in the East. Its epic evocation of the combination of boredom and terror, within an endeavour which became daily more meaningless, and more destructive, gives some perspective, and thus comfort.
For the events of the Eastern Front in the First World War, rather than those in the West, were the ones which proved truly historically decisive for Europe’s destiny: above all in the creation of the Soviet Union. Just so it is the accelerated shift of power and influence from the West to the East and the further rise of China, which I fear will be the primary legacy of Covid: and the challenge that represents is surely the most profound reason for condemning Brexit, and will most likely cause its eventual defeat.