Brits are waking up from the Brexit trauma

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That the new “Windsor Framework” was sealed in the shadow of the royal palace and afterwards by the visit of the EU boss to King Charles III. even something like royal consecration received, can hardly be surpassed in terms of symbolism. “Confidence in British politics has returned,” said an EU diplomat.

Economic disadvantages of Brexit are becoming more noticeable

That begs the fateful question: where is Britain headed seven years after the Brexit vote? Is the British prime minister keeping his promise to make Brexit a success with the “Windsor Framework”? Or is the end of the Northern Ireland dispute the beginning of a repentance process that could even reverse Brexit in the more or less distant future?

Most islanders now regret the break with their European partners, mainly because its economic disadvantages are becoming more and more noticeable in everyday life. “People realize that Brexit was a big mistake,” says Michael Heseltine in an interview with Handelsblatt.

The now 89-year-old former deputy prime minister is something of the European conscience of the ruling Tories and considers his country’s exit from the EU to be a “tragedy”. His former boss, the conservative ex-Prime Minister John Major, speaks of a “colossal mistake”.

Great Britain is not about to return to the European community anytime soon. However, the mood in the UK has changed fundamentally in the past two years: more than half of Britons now consider Brexit to be a mistake.

According to a survey by the Unherd polling institute, only three of the 632 constituencies in Great Britain still have a majority in favor of leaving. “The last half-dozen polls showed that as many as 58 percent would vote for EU membership,” writes political scientist and pollster John Curtice of the University of Strathclyde.

The fact that neither Sunak nor opposition leader Keir Starmer from the Labor Party has so far used this political momentum to repair what is probably the greatest economic damage Britain has ever done to itself can only be explained by a mass political psychosis: the whole country, including its leaders Politician was caught in a trauma that no one wanted to touch and from which the country is now slowly awakening.

Whether Sunak can and wants to liberate the kingdom from this with his Northern Ireland push will possibly not only decide his political fate, but also determine the course of Great Britain for the foreseeable future. So far, the governing Tories and the opposition Labor Party have outbid each other with the promise: “We will make Brexit work.” This still contains the defiant belief that the wrong decision must only be pursued consistently and long enough to ultimately reach the goal come.

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Brexit advocates such as British Energy Minister Grant Shapps admit that the exit will lead to upheavals “in the short term”, especially in the economy. In the long term, however, the balance will be positive. However, it could take up to 50 years for the benefits of leaving the EU to materialize, Jacob Rees-Mogg from the right-wing party of the Tories has predicted.

However, many Britons are tired of waiting for the promised “Brexit dividend”. “Make Brexit work is an illusion,” says Belgian European politician Guy Verhofstadt. “British politicians lag far behind public opinion.”

Above all, Verhofstadt can cite economic evidence for his devastating verdict. The political establishment in London is constantly researching the causes of the current economic crisis and ideas for growth.

Central bankers complain about the enormous loss of productivity

So far, however, no leading politician wants to question Brexit as one of the most important reasons for the decline. “The Tories don’t want to talk about it, Labor doesn’t want it, the unions and the CBI don’t want it, and national television channels also avoid the issue,” said former British Treasury Secretary George Osborne.

In the meantime, even the British central bankers have presented an assessment of the damage caused by Brexit. According to calculations by Jonathan Haskell, external member of the Bank of England’s (BoE) monetary policy committee, the exit from the EU “nipped in the bud” many private investments. He put the resulting lost productivity at £29 billion – or £1,000 per household.

His colleague Cathrine Mann blames Brexit for the persistently high inflation of around ten percent in Great Britain. “No other country has decided to unilaterally impose trade barriers on its closest trading partners,” says the economist.

According to forecasts by the International Monetary Fund (IMF), Great Britain will bring up the rear among the major industrial nations in terms of economic growth this year. Brexit is not to blame for everything. The kingdom has suffered from chronically weak investment and low productivity for decades.

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James Smith of the major Dutch bank ING in London does not expect the agreement on Northern Ireland to bring about any substantial improvement in English illnesses. “The economic impact on the UK economy as a whole is likely to be negligible,” he writes. A boost for more investments is also not to be expected – also because Brexit is only one of several uncertainties that are weighing on the investment climate.

Sunak is trying to banish the “Brexit hangover” in the economy with the vision of an “innovation nation”. But Great Britain is weakening even in its flagship discipline “Life Sciences”: The pharmaceutical company Astra-Zeneca no longer wants to build its new plant for 360 million dollars in Northern England as originally planned, but in Ireland.

CEO Pascal Soriot justified the decision primarily with corporate taxes in Great Britain, which Sunak wants to increase drastically due to lack of funds. Emma Walmsley, CEO of pharmaceutical giant Glaxo-Smithkline, had previously warned that the research nation Britain was at a dangerous turning point.

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There was also a severe setback recently in battery production, another future technology in which the British want to be world leaders: the start-up Britishvolt, which had planned a gigafactory for electric vehicles in the north of England and which the government is supporting with a three-digit million amount went bankrupt and has now been sold to Australian investor Recharge.

The fact that high-ranking politicians from both sides of the Brexit debate have now broken the silence for the first time in Ditchley and are thinking about ways out of the economic misery after the exit makes the meeting so dangerous.

However, the fact that the illustrious group had to meet in secret also shows how difficult an open discourse on an honest balance sheet still is almost seven years after the referendum.

Tories and Labor fear voters

“The leaders of both parties are looking ahead to the next elections, and nobody wants to alienate the minority of hard-line Brexit supporters,” says Heseltine, explaining the wall of silence. The party leaders have completely different walls in mind: Labor wants to win back seats in the so-called “Red Wall” of the northern English industrial regions that have been lost, the majority of which voted in favor of leaving the EU in 2016 and for the Tories in 2019.

The Conservatives, who lag about 20 percentage points behind the opposition in opinion polls, don’t just need the former Labor strongholds to win the elections. Nor must they disappoint their regular voters in the conservative south, the so-called “Blue Wall”. For many of them, the EU is still an anathema today.

Whether there is a political way out of the political impasse into which the country has maneuvered itself, from regret to reversal, is the crucial question, says Heseltine. The Tory veteran, who once challenged the “Iron Lady” Margaret Thatcher and was instrumental in her downfall, is skeptical: “We need a generational change for this. This is the only way we can get the positive momentum to return to the EU.” And the British need more evidence of the economic disadvantages that Brexit will bring.

Rishi Sunak delivered this involuntarily this week when he wanted to politically sell his deal with Brussels in Northern Ireland. “Northern Ireland is in a unique position in the world as it not only has privileged access to the UK’s internal market (…) but also to the European Union’s internal market,” stressed the British Prime Minister. Many Brits have wondered why only Northern Ireland and not the rest of the kingdom are allowed to enjoy the benefits of the EU.

More: Northern Ireland remains part of the EU internal market – Sunak risks resistance in its own ranks