On 23 June 2016, slightly more than half of the UK’s voters, 51.9%, backed leaving the European Union, sending shock waves around the world as the UK started the painful process of divorce from the bloc. The result also sowed the seeds of one of the most divisive periods in British political history, with the resignation of two Conservative prime ministers, the sacking of 21 Tory rebels and a comprehensive victory for Boris Johnson on the back of his promise of an “oven-ready Brexit deal”. Now on the sixth anniversary of the referendum, one of the central figures in prosecuting that deal has given his verdict: “Brexit is working,” says Lord Frost, adding that those who say it is hitting the economy have “an axe to grind”. So do Frost claims stack up?
Is Brexit working? While it may be too early to tell whether his statement could be supported by evidence, Frost was asked by Anand Menon, professor of European politics and foreign affairs at King’s College London and director of UK in a Changing Europe, to examine it a different way – what evidence in future would convince him Brexit had failed. “An interesting question,” was his response. And the answer was not in trade figures but in gut politics. Would Britain’s divisions have healed? “One piece of evidence of failure would be if we are still debating this in five or six years’ time in the same way. I think it is to succeed it needs to settle in the British polity.” Economy – what Lord Frost says: He said the predictions of a 4% contraction in Britain’s gross domestic product used by the Office for Budget Responsibility (OBR) were not fact but “zombie figures” based on a government economic services report in 2018 that relied on academic studies of the impact of opening up “badly run ex-communist and ex-authoritarian autarchic economies”. He was referring to a 79-page report, EU Exit: Long term Economic Analysis Technical Reference Paper, which looked at five Brexit deal models and their impact on the 12 regions of the UK taking trade and non-trade barriers into account. But Frost said its predictions could “not be supported by objective analysis” with UK growth “at much the same pace as other G7 countries since the referendum and goods exports to the EU “at the highest level ever”. He also argued that the precise impact of Brexit may never be known as trade figures were clouded by disruption caused by the pandemic, the supply chain crisis and the war in Ukraine. What others say: Four years on, the OBR maintains its predictions. Its latest, March 2022, forecast said that the trade deal Frost sealed would “reduce long-run productivity by 4% relative to remaining in the EU”. It said that reflected its view “that the increase in non-tariff barriers” such as red tape, standards compliance, was an “impediment to the exploitation of comparative advantage”.
OECD figures showed the UK was ahead of France, Italy, Germany and Japan in the percentage change in its GDP between the final quarter of 2019 and the first quarter of 2022, but behind the EU as a whole, and substantially behind the US, Australia and the G20 as a whole. This week a Resolution Foundation report said Britain had experienced a sharp decline in trade openness (total trade as a share of GDP) since 2019, falling eight percentage points. This compared with a two-percentage point decline for France, it added. “The full effect of the TCA [trade and cooperation agreement] will take years to be felt but this move towards a more closed economy,” said the authors. Menon said: “Early evidence suggests there is a Brexit impact and recent Resolution Foundation analysis suggests that, over the medium term, this will be significant.” Northern Ireland protocol: what Frost says: This remains unfinished Brexit business and the “biggest problem” caused by Britain’s exit from the EU. “The delicately balanced compromise that we put in place in 2019, recognising that we were running high levels of risk in doing so, has come apart much more quickly than most of us thought,” Frost said. He blamed the EU, which he said was refusing to look at compromises despite the sensitivities. What others say: This is entirely consistent with government policy, which has been met with a chorus of disapproval by many parties and support within the Brexit backbench community and conditional support with the Northern Ireland unionist community. Anything else? Reports over the weekend suggested Frost had some input into the drafting of the controversial bill to scrap parts of the Northern Ireland protocol. But unscripted remarks suggest there was not a meeting of minds. He expressed surprise that article 16 mechanism had not been triggered, arguing it would have bee a “quicker” way to resolve the dispute with the EU. This could reinforce the view that government’s plan all along was to bring forward legislation as a blunt negotiation tool.