Nine years after backing Brexit, Britain's economy is more European than ever

Monday will mark the ninth anniversary of the EU referendum. As you may have gleaned from these pages, I have been critical of Brexit. That said, there were – and indeed remain – sound economic arguments for the UK's exit from the EU.
The European project, in its early years, was a force for good. By opening up trade between nations and reducing frictions to capital and labour flows, partly by harmonising rules and regulations across countries, it brought together a group of culturally like-minded nations with long historical ties in a way that enhanced both their prosperity and collective standing in the world.
But then, along the way, it got badly off track. As Brussels bureaucrats broadened their remits and imposed ever more anti-growth laws upon European economies, the club turned into a gradually worsening headwind to economic progress and a source of
political instability. This was a particular problem for the UK, with its more market-oriented economy and common law legal system.
If the UK wanted any hope of keeping pace and staying relevant in a rapidly changing world, it needed to be politically nimble and economically flexible – and the EU offered neither. That is the case for leaving the bloc.
But almost a decade on from the decision, what can we say about the results so far?
First, following waves of instability and uncertainty in the first few years after the referendum, UK politics now looks mostly settled. This is not an assessment of either the quality of policy decisions or the proposals put forward by any of the major parties, but simply to say that the temperature of politics has cooled to a normal level.
The same cannot be said for the US, where politics has taken an almost sectarian turn. Or the European continent, where openly far-Right and far-Left parties are one accident away from sweeping into power in a host of countries, including France.
Second, we have only half-managed to make the most of our freedom to act independently on matters of international economic cooperation. As the Government's recent deals with the US and India show – in addition to the temporary cut of import tariffs
to zero across a range of products in response to rising global trade frictions– the UK can now move at a much faster pace than before and can decide for itself what is in its own interest. But no deal yet has been truly ambitious enough to correct the wrong-headed notion that Brexit represents an inward turn.
Third – and this is where the failure and irony lies – with each year that passes, the UK increasingly resembles the caricature of an overtaxed Continental economy with an overgrown and heavy-handed state.
At 41pc of GDP, taxes have risen to their highest level since 1948. In 2016, the share was 37pc. While the burden of taxes has grown, ever more differentiated rates, allowances and reliefs, have made the system even more complicated.
Increases in corporation tax, which occurred under the previous Conservative government, as well as Labour's decision to increase employer National Insurance, are among the most anti-growth policy decisions in a generation.
Higher taxes, plus an eye-watering £1.2 trillion increase in the national debt, have pushed government spending from 40pc of GDP in 2016 to 45pc at present.
Today, nearly half of all spending in the UK economy is decided in the public sector, where the absence of the disciplining forces of profit and loss allow waste and inefficiencies to grow unchecked.
If only Whitehall's spending spree had brought us Swiss trains or Dutch GPs. We have the receipts, but not the perks.
While the Government, to its credit, has made some progress in easing the archaic planning rules that inhibit much-needed investment in housebuilding and infrastructure, this has been eclipsed by an intensified push for net zero and a score of new anti-employment labour laws.
Businesses now spend more time wrangling paperwork than innovating, investing and wooing customers – a sad twist of fate for a country that once ran an empire on ledger books and tea.
When it comes to taxes and public spending, and major parts of regulation, the EU never mattered all that much anyway. The fundamental choices about the overall size and responsibilities of the state, as well as the rules that govern domestic markets, were largely decided in London.
Brexit has shown, more than anything, that the UK's major economic problems were home-grown. Without the EU as a scapegoat, it has now become clear where responsibility lies. In the long run, this bitter lesson should do us a great deal of good. By returning decision-making power to Westminster, democratic accountability has been strengthened.
And while we may have to go through a few turns of the game, voting out governments that fail to solve problems and fall short of their lofty campaign promises, it stands to reason that eventually we will land on a set of policymakers with solutions that actually work. Democracies operate through trial and error.
For this reason, we should be cautious about judging Brexit on its immediate impacts. The short-run consequence of leaving the EU may not provide a reliable guide as to whether it will be for better or worse in the final analysis. Indeed, a lot will depend upon the direction in which the EU goes and Britain's ability to strike new alliances in a world that is turning more multipolar.
The English Reformation, when the Church of England broke from the Catholic Church during the 16th century so that Henry VIII's marriage to Catherine of Aragon could be annulled, is often cited as the original Brexit.
Historians debate whether the tilt toward Protestantism and its attachment to hard work, efficiency and thrift was a necessary, or merely helpful, condition for the great capitalist revolution in Britain that followed and shaped the modern world.
But the point remains that one did indeed follow the other. Most importantly, there were few early tell-tale signs that things might turn out so well, that is, judging by the ill-fated marriage record of Henry VIII.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Sky News

27 minutes ago

• Sky News

Sir Keir Starmer tries to contain rebellion among Labour MPs over welfare reforms

Sir Keir Starmer had a series of one-on-one meetings with Labour MPs on Friday to try to contain a rebellion on the government's welfare reforms. Ahead of the assisted dying vote, the prime minister met privately with some of the dozens of MPs with concerns about the proposed cuts to sickness and disability benefits. The first vote on the legislation, which the chancellor says will save £5bn a year from the welfare bill, will be held in early July. The prime minister's involvement at this stage suggests a major effort is underway to quell a potential rebellion. Cabinet ministers say they do not expect mass resignations, but one junior minister told Sky News that opposition to the reforms was "pretty strong". One frontbencher, government whip Vicky Foxcroft, resigned her post yesterday, writing that she understood "the need to address the ever-increasing welfare bill" but did not believe the proposed cuts "should be part of the solution". Other junior ministers and whips have not, as yet, moved to follow her. But one government insider said: "It's difficult to tell if the mood will harden as we get closer. There's a lot of work going on." The package of reforms is aimed at encouraging more people off sickness benefits and into work, but dozens of Labour rebels said last month that the proposals were "impossible to support". 1:34 Welfare secretary Liz Kendall is also meeting individually with MPs. She said earlier this week that the welfare system is "at a crossroads" and the bill was about "compassion, opportunity and dignity". Ministers are trying to convince MPs that a £1bn fund to support disabled people into work, and the scrapping of the Work Capability Assessment, a key demand of disability groups, make the cuts package worth voting for. They insist that 90% of current claimants of personal independence payment (PIP) will not lose the benefit. But disability groups say the cuts will have a "disastrous" effect on vulnerable people.

Times

30 minutes ago

• Times

Florian Wirtz: Liverpool sign Bayer Leverkusen star on five-year deal

Florian Wirtz has revealed how Arne Slot's vision for Liverpool persuaded him to join the club for what could become a British-record transfer fee of £116million. The Germany playmaker admitted there was a time when he 'didn't expect Liverpool to be his next club', only for the power of the club's sales pitch to convince him to leave Bayer Leverkusen and reject interest from Manchester City and Bayern Munich. Wirtz also spoke of the profound effect that losing 4-0 at Anfield with Leverkusen in the Champions League last November had upon him as he described Liverpool as 'machines'. Liverpool have paid £100million for the attacking midfielder, with a further £16million dependent on bonuses, and their summer outlay will continue as they have agreed to sign the Bournemouth left back Milos Kerkez in a £40million deal. That will take the spending beyond £200million, of which Wirtz is the undoubted centrepiece, with the 22-year-old confident he will continue to develop under the tutelage of Slot. 'I just thought that it was the right point in my career to make the next step and, of course, I wanted to get to a club that is from the top three in the world, and Liverpool was one of them,' he said. 'The people say I'm a creative player and I hope I can bring this creativity to the team and also the joy on the pitch. I try to make assists, goals and run for the team and defend. I hope I can just make the team one step better. 'I just saw myself in the best hands in Liverpool. I was really convinced by the people here, by the idea, and everything the club offers me was really good. It was not that easy for me, for sure, because I am a German player. I play for the Germany national team. 'So it was not easy for me to decide, but the talks with the coach [Arne Slot] and Richard [Hughes, sporting director] and everybody were, from the very first time, so good and it just kept going like this. 'Every time I spoke to one of the [people from] the club I felt like, 'This is the place I want to be,' and so in the end I was really 100 per cent convinced I want to join Liverpool and it was the best choice. 'I can remember the first time, he [Slot] already showed me some scenes of how we want to play and how I could fit in the team. He was just telling me that I'm a player he really wants to have in his team and can bring the team a step forward. I just could imagine it [being] good to be in the team and to make it better because I have to make my performances every week — but I'm here for this. 'I was the first one in my family who was really into this club when they spoke to us or told us that they are interested in signing me. For sure, I didn't expect that Liverpool will be my next club but my family was supporting me and I didn't have to convince them about the club or something. 'I'm not coming [to] have fun here. I want to achieve something and give the fans what they deserve. Last season they won the Premier League so my goal is, for sure, to win it again and also to go further in the Champions League. I'm really ambitious.' Wirtz referenced the defeat Leverkusen endured last season and said he had watched both the title celebrations against Crystal Palace and the end-of-season parade and had been wowed by the joyous scenes. He had flown into Manchester airport on Thursday before beginning a medical that he completed on Friday. Wirtz will return for pre-season training on July 8. 'It was really tough to play here,' Wirtz continued, during an interview with Liverpool's website. 'I was still thinking about the game when I spoke to the coach or the other guys. It was an example [of] how it can be here. We lost 4-0 and we had to run so much and lost almost every duel. I just wanted to be part of this team. 'Inside me, I was feeling this quality of the team and also the size of the club. Inside me, I was always thinking about this game. I could remember how it was playing here.' Should the bonuses be triggered, the Wirtz transfer would outstrip the present British record of £115million, paid by Chelsea to Brighton & Hove Albion for Moisés Caicedo in 2023. Liverpool will look to finalise Kerkez's transfer next week and have already spent £29.5million on signing Jeremie Frimpong, who was Wirtz's team-mate at Leverkusen and taught him to speak English. A similar fee has been paid for the Valencia goalkeeper Giorgi Mamardashvili and £1.5million has been spent on another goalkeeper, Armin Pecsi of Puskas Akademia. With Jarell Quansah set to join Leverkusen in a deal worth about £35million when his participation with England in the European Under-21 Championship is over, there is also interest in Palace's Marc Guéhi. Bournemouth want at least £65m for PSG target Zabarnyi Bournemouth have valued Illia Zabarnyi at more than £65million in talks to sell the centre back to Paris Saint-Germain (Gary Jacob writes). The French club made an increased offer worth up to £55million for Zabarnyi, who signed a five-year contract last summer that does not have the type of release clause that allowed his defensive partner Dean Huijsen to join Real Madrid for £50million last month. PSG made a first offer of £40million plus £5million in add-ons for the 22-year-old. Zabarnyi cost £24million from Dynamo Kyiv in January 2023. West Ham United want about £25million for Nayef Aguerd after interest in the centre back from Juventus. Aguerd, 29, has two years left on his contract and was on loan at Real Sociedad last season. He joined from the French club Rennes for about £30million, including add-ons, in 2022. Southampton have rejected Atalanta's increased £12million offer for Kamaldeen Sulemana, the winger. The Atalanta head coach, Ivan Juric, stood down as Southampton manager in April after the club were relegated from the Premier League.

The Sun

41 minutes ago

• The Sun

Heads must roll over pro-Palestinian thugs break-in at RAF Brize Norton

Brize idiots HOW on earth did pro-Palestinian thugs manage to break into RAF Brize Norton to damage two military planes? Breaking through the perimeter fencing is one thing. 1 But why weren't they stopped in their tracks by armed guards before they got anywhere near military assets? Instead, the first hapless commanders heard of it was when Palestine Action gleefully posted their footage online. It's beyond belief that security could be so lax at a time when the base is on high alert over Iran and Russia. Results of a full investigation must be made public and, if necessary, heads should roll. Meanwhile, this wasn't a harmless stunt by a cosy protest group. Palestine Action is made up of dangerous fanatics bent on attacking our country from within on behalf of a foreign cause. Lord Walney, the Government's ex-adviser on political violence, recommended it be outlawed as an extremist political group more than a year ago. The militants have since gone on to terrorise workers at weapons factories and people outside Crown courts. We welcome Home Secretary Yvette Cooper's decision to now proscribe the hate-filled group. The question is: Why did it take so long? Shock moment pro-Palestine protesters break into RAF Brize Norton & spray 2 military planes with paint before escaping Dead loss ASSISTED dying is a deeply emotive and complex issue. In brutal terms, it amounts to state-sanctioned killing. On that basis, it's deeply worrying that Kim Leadbeater's ill-considered private members' bill is now set to become law. It simply does not have enough safeguards, particularly for the vulnerable, poor and disabled. During yesterday's debate, the idea it might allow families to coerce elderly relatives into early deaths was brushed aside as though such a thing could never happen. Fears from hospice carers were also dismissed. The Government has been absent throughout the legislative process and nearly 150 MPs ducked the decision and abstained. Crime associated with illegal migration is of significant public interest and concern in the wake of the Casey report into grooming gangs.