Article 50 and the Great Brexit Opportunity Cost

by Stephen Tall on March 29, 2017

Brexit could be okay. It might happen.

Maybe it will be possible for the UK to negotiate constructively with the other EU states an exit which respects the rights of EU citizens in the UK and UK citizens in the EU, maintains good trading relationships, doesn’t jeopardise Northern Ireland’s fragile peace, and ensures continued cooperation to defeat security threats within and beyond our continent’s borders.

There is no rational reason why either our Prime Minister or the other 27 heads of government in the EU should want anything other than that to happen. Of course, the opportunity costs of this process are immense. The UK has committed itself to the biggest ever political and legal process any peace-time government has undertaken in order to try and retain what we already have.

David Davis has promised the Government will deliver the “exact same benefits” as we have now. It is almost impossible to see how it can make good on that pledge. The Prime Minister has notably avoided offering such a hostage to fortune.

We will, as a nation and as individuals, end up worse off as a result of Brexit. How much poorer is open to debate. Hopefully the economy will keep growing, albeit most likely at a slower pace than it would have otherwise done, and therefore the financial sacrifice will be invisible. A sacrifice, we shouldn’t forget, that has been imposed on those who work (who voted Remain) by those who don’t (who voted Leave).

For all that the British economy has proved itself more resilient than expected since 24 June — propped up by the Bank of England’s swift actions — the bounce from a Remain win, and the avoidance of sterling’s collapse, would have meant the UK today would have been better off than in fact we are. That’s another opportunity cost.

But the biggest opportunity cost is that Brexit will dominate our political lives for the next five years (at least) when there are much bigger issues to worry about. “Terrible infrastucture, v low productivity, political instability, low wages, economic polarisation. UK goes into Brexit in really bad way,” as the Economist’s Jeremy Cliffe gloomily but accurately remarked.

Instead of focusing on fixing the problems we have — and which are the actual root causes of the reasons for Brexit, such as the skills shortage in our workforce and under-pressure public services, especially health-care — we’ve chosen as a nation to create a whole heap of new ones. Brexit will push out all else.

Nothing is inevitable. Brexit may defy expectations. The UK could emerge from the Article 50 process in two years’ time domestically intact and ready to try and work out its post-EU role in the world. I hope so, genuinely.

But even if that happens, don’t believe for a moment it has been a cost-free exercise. Those opportunity costs are already being racked up.