July 9, 2018.
Our departure from the European Union needs to be done on the basis of facts, rather than the dangerous untruths that we have been peddled for the last two years, argues Campbell Macpherson, CEO of Change & Strategy International and author of the 2018 Business Book of the Year, ‘The Change Catalyst’.
Our politicians completely misled us about Brexit. Yes I know politicians continually bend the truth but this time it is something every single one us should care about – whether we were among the 17.4 million who voted to Leave, one of the 16 million who voted to Remain, one of the 10 million registered voters who didn’t manage to vote or one of the 1.5 million people who were sixteen and seventeen back on 23 June 2016.
Why should we care? Well, the logical reason is because the future of our nation is genuinely at stake this time. The emotional reason, and therefore by far the stronger one, is … they wantonly misled us!
It has become abundantly clear in the 25 months since the referendum that every one of the main promises that we have been systematically fed has categorically been proven to be utterly false:
- We were told we had to leave the EU in order to “take back control of our borders”. We don’t.
- We are still being told that leaving would give us an extra £350 million a week for the NHS. It won’t.
- We are still being told that it will be easy to strike a frictionless trade deal with the EU because “the EU needs us as much as we need them”. They don’t.
- We are still being told that we can easily strike trade deals with non-EU countries. We can’t.
- Finally, we are now being told by hardline Brexiteers that a ‘Hard Brexit’ is the only true Brexit and a ‘Soft Brexit’ that keeps us in the customs union (like the compromise position that the full cabinet has supposedly agreed last weekend) would be a betrayal of the will of the people. No it wouldn’t.
Let me deal with the last one first.
Untruth #1: A Soft Brexit would be a betrayal of the will of the people.
This is disingenuous nonsense. The majority of people who voted in the referendum did not vote to leave the EU customs union or single market. For arguably the first time in the last two years, the Prime Minister is finally speaking for the majority of Britons in seeking a ‘Soft Brexit’; that is a future with close trade ties to the EU.
48% of voters voted to Remain in the customs union and single market. So, for the Hard Brexiteers claim to be true, 96% of Leavers must have wished to leave the customs union and/or the single market. A cursory analysis of the numbers shows that this is pretty much impossible.
Far more than 4% of those who voted Leave did not vote to leave either. The people that voted to Leave did so for four main reasons:
- To take back control of our borders (This was the main motivation for 33% of Leavers)
- To be free of the expensive and wasteful bureaucracy of Brussels
- Because they had nothing to lose, having been left behind by globalisation and the fallout from the 2008 financial crisis
- A rousing notion of patriotism – to make Britain ‘Great’ again to steal Donald Trump’s (and Reagan’s before him) catchy yet meaningless phrase.
While the vast majority of those in Group 1 did indeed vote to leave the customs union and single market (mistakenly believing that this was the only way to curb immigration), the same cannot be said for those in the other 3 groups. Many in Group 2 wanted the EU to reform and some were simply registering a protest vote. People in Group 3 wanted better paid jobs. They still do. Even some of those in Group 4, with the strains of Elgar ringing in their ears, expected to be able to strike a free trade deal with Brussels.
Consequently, even before you factor in how the demographics of the electorate has changed in the two years since the referendum, it is patently incorrect to say that the majority of people voted for a Hard Brexit. They didn’t.
Untruth #2: We were told we had to leave the EU in order to “take back control of our borders”.
This was never true. It isn’t true today. As was reported in the FT just last month, we have had powers to curb immigration all along. Even though Nigel Farage used Nazi-era-inspired images of long queues of immigrants snaking their way towards Britain in his campaign propaganda, he has since admitted, live on LBC, that we had control all along.
The French government subsidises certain jobs if they are given to French citizens. Karan Bilimoria, a crossbench peer, reported in The Guardian a year ago, “The European Parliament and Council Directive 2004/38/EC allows EU member states to repatriate EU nationals after three months if they have not found a job or do not have the means to support themselves. Other countries, such as Belgium, regularly repatriate thousands of individuals based on this directive.”
Perhaps the reason that Cameron and Osborne didn’t mention this during the referendum is that it would have shown that they had immigration-curbing tools in their hands all along but had decided not to use them – as did Blair and Brown before them.
But it seems we could assert some control after all.
Untruth #3: We were told that leaving would give us an extra £350 million a week for the NHS.
Even Farage distanced himself from this whopper – after the referendum obviously. And yet it is one which keeps on rising from the dead. Only a few months ago, then Foreign Secretary Boris Johnson declared that his £350m figure was “a gross underestimate”. Just last month, the usually uber-cautious Prime Minister chimed in that a “Brexit Dividend” would help fund increased NHS spending. Another fantasy which Boris swiftly leapt to agree with, tweeting “Fantastic news on NHS funding – a down payment on the cash we will soon get back from our EU payments.” However, back in the real world, “There is no Brexit dividend,” as Paul Johnson of the Institute of Fiscal Studies pointed out. “The government has already accepted their analysis that Brexit will weaken public finances by c£15bn a year.”
In reality, that headline figure of £350 million a week (£18.2 bn a year) is simply “not the amount of money that the UK pays to the EU each year” to quote the chair of the UK Statistics Authority, who went on to describe Boris’ figures as “a clear misuse of official statistics”. If it smells like a lie and looks like a lie …
According to fullfact.org, in 2016, our government paid £13.1 billion to the EU budget after the UK rebate. EU spending on the UK was £4.5 billion. So the UK’s net contribution was about £8.6 billion – much less than half of the figure Johnson splashed on the side of his bus.
This £8.6bn a year is a membership fee; one that is arguably not even commensurate with the size of our economy. In return for which we enjoy tariff-free trade with the world’s second largest economy.
The government has already agreed that it will have to pay the EU some £37bn when we leave and we will be paying off our divorce bill for another 46 years, according to the latest economic forecasts from the Office for Budget Responsibility. And that is before we either pay for free trade access (like Denmark and Switzerland) or subsidise companies to convince them to remain in the UK.
There is no £350m a week for the NHS.
Untruth # 4: We were told that it would be easy to strike a frictionless trade deal with the EU because “the EU needs us as much as we need them”.
They don’t. Without the UK, the EU is still a $15-17 trn economy (the chart on the right shows global GDP on a parity purchasing power basis). The UK is a $2.5-$3 trn economy. We are a minnow in comparison.
43% of our exports go to the EU. 18% of the EU’s exports are to the UK. We have a great deal more to lose.
Why did European and global companies establish their factories and operations in the UK? Certainly our skilled workforce and our traditionally business-friendly environment are key reasons, but the main one was – because we were in the EU.
If we leave the European customs union, companies can choose to locate their future factories and premises in any of the remaining 26 EU countries if they wish to continue to enjoy frictionless trade and cross-EU supply chains. BMW, Airbus, Jaguar Land Rover, Nissan and countless other large employers have made this abundantly clear. Several major international banks have started to move what looks like being thousands of jobs to their new mainland European hubs. Several European agencies have already moved their head offices out of the UK.
We need the EU more than they need us.
We instinctively know this. The latest Ipsos MORI poll shows that 70% of us believe that the government will not be able to secure a good deal with EU negotiators.
EU Rules. OK? Another interesting point to ponder is that the EU is a club. We have told them that we intend to leave but that we would like a special membership arrangement once we have left. I used to be a member of a well-established golf club and I asked them for a special membership arrangement when I went overseas to work for a few years. I figured that golf clubs were crying out for members and that they needed me as much, if not more, than I needed them. I was wrong. They said no. It wasn’t in their rules. And they set the rules – it’s their club.
Untruth #5: We were told that we could easily strike trade deals with non-EU countries.
How we fell for this, I will never know. Wishful thinking perhaps. Certainly a triumph of blind optimism over stark reality. Obama warned us when he said that if we left the EU, Britain would “go to the back of the queue” when it came to trade deals with the US. He was roundly derided for sticking his unwanted beak into British domestic matters – but he was right. As the Prime Minister of Japan told Theresa May rather bluntly when she visited Japan just weeks after becoming PM herself, Japan will do a deal with the EU first – before it negotiates a deal with the much smaller UK. This isn’t nasty or spiteful. It is simply a matter of prioritisation. It is also logical to presume that the EU will get a better deal than the UK will, simply due to the fact that the EU has 440 million potential customers while our population is just 66 million.
And it will be even worse when it comes to US/UK trade. Any vague chance of securing a good trade deal with the US disappeared in November 2016, the moment Donald Trump was elected President. Trump doesn’t believe in win:win negotiations. To him, all good negotiations are win:lose. The man who has already placed tariffs on European and British steel, is now threatening to place tariffs on Euoropean and British-made cars and welcomes a global trade war because “trade wars are winnable” – is not going to do any country any favours. “Only America First” means that in any bilateral trade negotiations, Great Britain will inevitably come second.
So what now?
First, we should be angry at the con-men (and a few con-women) who duped us and continue to do so. We should not place any trust, or authority, in the hands of Johnson, Gove, Fox, Davis or Rees-Mogg who continue to peddle these mistruths. In a perfect world, they would be held to account. Unfortunately, we don’t live in a perfect world.
Second, we should demand that our politicians start acting like grownups and vote according to the wishes of the people – the majority of whom want jobs and prosperity for future generations rather than some ideological ‘Hard Brexit’.
Third, like any good change programme, we should pause for reflection. 88% of change initiatives fail. Brexit is the biggest change initiative we are likely to see in our lifetimes. The main reasons why change fails so often and so spectacularly is a failure of leadership and a lack of clarity about what we are trying to achieve – and why. (Sound familiar?) Another is that leaders fail to ‘pause for reflection’ mid-programme to check whether a) the outcomes are still possible and b) whether this is a journey that we wish to continue.
To an increasing number of us, the answer to those last two questions when it comes to Brexit are “Doesn’t look like it” and “Probably not”. It seems the outcomes we were sold never were possible. I know that March 29 is fast approaching, but it’s time we paused and reflected. Perhaps then we could all make a conscious, and informed, decision regarding the path that our country should be taking.
Campbell Macpherson
campbell@changeandstrategy.com
