The long Brexit decline

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The long summer break is over, and British politics is back discussing the subject of the moment-- what else? Brexit. I'm joined by the FT's political columnist Janan Ganesh. Janan, you wrote this week that Brexit won't deliver a moment of crisis for the British economy or for British society, but that the consequences of Brexit will be severe, although noticed only gradually. Could you explain your theory?

Yeah, I think Euro sceptics are entitled to feel smug about the absence of a crisis, because it was predicted by a lot of pro-Europeans and neutral institutions, and it hasn't transpired. The mistake I think the Euro sceptics make is to then go further and say, well, everything that's happened over the past 14, 15 months and is likely to happen in the future shows that they were vindicated, when in fact, if you look closely, we're already in this country growing more slowly than the Eurozone.

The projections for the future that are most plausible don't have a crisis, that's true, but they do foresee Britain growing more slowly than it would have done under EU membership and conceivably slower than much of Europe. Gradual decline, even though you don't feel it at the time, does add up over a long period into almost the same thing as a disaster, which is substantially poorer country and enfeebled country. And the historical parallel I just introduced in the column was those three decades after the war when this country was not a disaster zone at all but was making lots of small mistakes, missing out on lots of small bits of economic growth and opportunities, and by the 1970s it really pinched and manifested as a crisis.

So in fact, you say that it may take a couple of decades for British people, as you put it, at the departure lounge noticing that we're not just in a different immigration queue to the rest of the EU, but funnily enough, the others from France and Germany look a lot more prosperous, and that's something's subtly gone wrong.

Yeah. In the '70s it did happen. I was reading lots of accounts of the social history of the '70s, because I already knew about the three-day week and the OPEC crisis and garbage not being collected, all the other things that went wrong, famously, in the '70s in this country. What I didn't understand was this sense of-- not steep inferiority to places like France and Germany, but noticeable inferiority, where on holiday people felt noticeably poorer. They had less money to spend, were booking less fancy hotels and resorts, and that fed into a sense of national anxiety at the end-- at the turn of the '80s, which this country then did a lot of things to fix in terms of structural economic reform. And I wonder whether, projecting 20 years, 25 years, that will be something that happens again.

So in fact, we were then the sick man of Europe, and we could become that again. Ironically, it was the Conservative Party that then plucked us out of that long-term decline, but now it's the Conservative Party that's plunged us into Brexit.

Yeah. And well, the Conservative Party used to have a view on the European Union which is entirely different to the view it has now, in that in the '60s it applied to join the European project and was rebuffed and then joined later again under a Conservative government. As late as the '80s, it was a pro-EU, or at least pro-creation of the single market, type of party.

Do you think much has changed over the summer, in terms of-- the government has been putting out these position papers. The negotiations have restarted. We're expecting a big speech from May later this month. And of course, the Labour Party has made its own position on where the country should be with regards to Brexit.

I think they've changed quite a bit, actually, more than I was expecting at the beginning of the summer, so that the new Labour Party position on Europe, which is to maintain single-market membership during any transition period, I think will make it very difficult for the Tories not to follow, actually. There'll be pressure on them to sketch out a much more substantive version of the transition period. And of course, Theresa May herself has come out and said that she's going to stay on as prime minister for the long term. I don't believe for a minute that she will, but the biggest change over the summer is just the fact that the clock is still ticking on those negotiations. Two months have passed, and it doesn't seem like we're that much closer to, if not a deal, then at least a good deal, than we were in June.

I think Nick Clegg had an image, didn't he, that it's like staring at the building site and saying, well, we've made a start because we've put the kettle on for a cup of tea.

And the big question that's going to have a hit in the autumn going into next year as well is the question of the financial settlement, the bill that Britain pays for leaving. And that hasn't really been entered into yet is a topic, and that could be a huge political subject.

Janan Ganesh, thank you very much.

Thank you.