The real Brexit challenge – stop things getting worse

In a parallel world, this month Britain would have been celebrating the 50th anniversary of entry into the European Communities, and five decades of working in solidarity with neighbours to find common solutions to common problems.

Instead, this week it marked the 10th anniversary of David Cameron’s Bloomberg speech, when a reckless prime minister gambled the country’s prosperity on a naive bet that he could renegotiate the terms of EU membership ahead of an in/out referendum without bothering to first consider what he wanted to change.

As a result, Britain will mark the third anniversary of the consequence of Cameron’s carelessness: its departure from the EU.

What makes this anniversary so striking is that it comes as polls show a commanding majority of Britons now think that Brexit has been a costly mistake.

While Brexit is not the primary cause of Britain’s current economic troubles, it has unquestionably made them worse.

It is the only major economy whose GDP is still below prepandemic levels, while its trade performance has significantly underperformed that of comparable countries. The end of free movement led to a shortfall of 330,000 workers, contributing to a severe labour shortage, particularly in sectors such as retail and hospitality, according to a new study by the Centre for European Reform.

That is fuelling inflationary pressures. Investment has flatlined since the 2016 referendum.

No wonder that there is now an urgent national debate on how to improve the situation. One muchdiscussed solution can be ruled out: there is no prospect of Britain rejoining the single market and customs union, let alone the EU itself, in the foreseeable future.

That leaves Britain with no option but to make the best that it can of Boris Johnson’s bad job.

There is certainly no shortage of ways in which businesses would like to see the Trade and Cooperation Agreement (TCA) negotiated by the former prime minister improved.

Top of the wish list for many would be a wide-ranging mobility deal, both to allow British businesses to recruit from the EU to fill their labour shortages and to allow British citizens, including professionals and performers, to ply their trade more freely on the continent.

Others would like to see a deal on food standards, which would pave the way for a reduction in border checks. Universities are desperate for Britain to be readmitted to the Horizon research funding programme, to prevent a brain drain of academic talent.

Yet the real challenge is not to improve the situation but to avoid it getting worse.

A new report published this week by UK in a Changing Europe, a think tank, highlights the numerous grace periods and shortterm deals in the TCA that are due to expire in the coming years.

Navigating these milestones will require careful negotiations. Yet to the extent that those negotiations will rely on goodwill, everything hangs on the outcome of efforts to resolve the dispute over the Northern Irish protocol. This continues to cast a long shadow over bilateral relations.

British businesses are also staring at a series of nationally determined transition arrangements that end soon. At some point, much-delayed full customs checks are supposed to be introduced.

The government is pushing ahead with a bill to remove all EU law from the statute book by the end of 2023, condemning business to yet another year of uncertainty.

Brexiteers always said that Brexit was a process, not an event. They were right. The risk is that it is a process that is only heading one way.