A year of Prime Minister Johnson: Getting Brexit Done and getting into difficulties?

When Boris Johnson stood on the steps of 10 Downing Street a year ago, the Conservative Party was still reeling from its dreadful showing in the European elections, inflicted on the UK as the price of Theresa May’s second Brexit extension. The Brexit Party and its inevitable leader Nigel Farage were still making waves. A Brexit deal was stuck in parliament and the People’s Vote campaign was on the brink of landing its biggest scalp: the Labour Party would commit to a confirmatory referendum at its conference. Brexit was very far from ‘done’ – and arguably looking more uncertain than ever.

A year later the prime minister can – with justification – point to a string of successes. The Brexit Party polls regularly at 2% or so and for now seems an irrelevance. Parliament was stared down and caved into conceding an election which paved the way for passage of a withdrawal agreement that took the UK – or at least GB – out of the EU’s political and economic institutions. Brexit, meaning ending the UK’s 47 years of EU membership, finally happened, on 31 January.

And the government did so with the benefit of a solid majority and had the momentum to give it no excuses to fail on its own reform project: levelling up, restoring public services and launching ‘Global Britain’.

Coronavirus has thrown Johnson’s domestic agenda off course

The problem for the prime minister is that his government looks, at least for now, like 31 January was its high point. Since then Johnson has had to respond to a global pandemic that has exacted an unimaginable (and in Whitehall unimagined) human and economic cost, and which has tested an inexperienced cabinet’s competence to the limits. And this, while also trying to deliver the hard part of Brexit – a prosperous future relationship with the EU.

The government will find the chronic recovery phase of the pandemic (if it manages to avoid a second peak, which might tip it back into to crisis) a harder slog than the acute crisis phase. It will face harder choices, and have to court greater unpopularity as the economic consequences become apparent. And it will have fewer levers to affect those consequences – they will depend on the decisions of hundreds of thousands of businesses, driven by the decisions of millions of individuals. The government will have more influence if it retains public trust and manages to avoid putting more, unnecessary pressure on business.

With or without an agreement, the end of the transition period will be a tough time for businesses

At the same time, the future relationship negotiations are still stuck, we are told, on issues of principle: how far the UK will go to temper its demands for untrammelled sovereignty to maintain a decent level of access to its principal market. The sixth round of talks concluded without much progress reported – and with the prime minister’s ambition for negotiations to be wrapped up in July going unmet. However, this was always likely: despite there being less than six months to go until he end of the transition period, it is too early for either side to concede.

The one thing that the government is finally making clear is that – even with its preferred agreement – it is about to heap an unparalleled pile of red tape onto cash-strapped and struggling businesses. The breezy rhetoric of “exact same benefits” from the early phases of Brexit  – never deliverable with a “Canada-style agreement” – has given way to the realities of the Border Operating Model: a 206-page document setting out all the compliance requirements businesses will face on the UK – or, in many cases more accurately, the GB side of the border. There is further detail to come on how the border in the Irish Sea will operate under the Northern Ireland protocol – now clearly much more intrusive and disruptive than the government was prepared to admit at the time. And UK businesses will face new hurdles to do business in the EU – not just customs and checks at the other side of the border, but potentially a further heap of red tape on approvals and licences.

A deal would make a difference, especially to sectors exposed to tariffs, and it might smooth some of the edges off the impact of leaving the single market and the customs union – but not many and not much. 

It is possible to argue that the low point of economic activity is a good point to bring in change: as there is less trade to be affected. But the real risk is that business is not in a position – without the financial or human resources – to prepare. Some in government may hope that the Brexit disruption expected at the end of the year will be lost amidst economic statistics already distorted out of sight by the pandemic – but there are still real risks to parts of the economy that held up well, notably the food supply chain (mid-winter, of course, is the time we most depend on imports). The long-term risk is that a disruptive end to transition could see already wounded businesses forced to shut up shop for good.

The costs of Brexit will be rapidly visible: the government will find it harder to show the long-term benefits

The longer-term question for the government is whether it is able to point to any upsides of Brexit once the economy has weathered the pain. The government is already under pressure to agree a trade deal with the US – and has admitted it may not conclude one this side of the presidential election in November. So far the evidence suggests the farm/environment lobby is stronger than the cheap food lobby. Trade deals with other countries offer only marginal benefits. The government claims it will be able to help business recover better once they are untied from the EU – but we have yet to see any details of the proposed new state aid regime, which is itself a sticking point in the talks.

The prime minister has had a dramatic first year.  But the hard slog has barely begun.