4 October 2021

Brexit is ‘working’ – but it comes with a huge catch for the Conservatives

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Just when you begin to think there is nothing new under the sun in British politics, along comes a conference fringe event to set you straight. So, thanks then to Chris Loder, the Conservative MP for West Dorset, who yesterday said that he hoped supermarket supply chains would ‘crumble’ and ‘break’ so ‘the farmer down the street will be able to sell their milk in the shop like they did decades ago’.

I mean, where do you even begin? Would it be churlish to gently point out that if people wanted to buy their milk as such then a competitive free market would surely furnish us with the option? That a national food shortage would seem a rather high price to pay for the return of a commercial activity that, at least to my knowledge, remains completely legal?

Alas, perhaps so. Because it is beginning to seem like such sensibilities belong to a Conservative Party at least as buried in the realms of history as the visions that inhabit Mr Loder’s imagination. To be sure, it is not hard to find such romantic nonsense if you spend too long lurking around the edgier events of a political party conference. Yet there lies a political danger if the delusions of the fringe threaten to take centre stage. And on that front, Mr Loder’s magical thinking is not a million miles away from the core message espoused by his party’s leaders. According to the Prime Minister, recent petrol shortages are in fact the growing pains of a country moving away from a ‘tired economic model’.  Meanwhile, Business Secretary Kwasi Kwarteng told ConservativeHome that ’employers who had benefitted from an influx of cheap labour’ were ‘resisting’ a necessary post-Brexit transition.

Anyone wondering about the future economic direction of the Conservative Party would do well to read Kwarteng’s interview in full. For what shocks is not the truisms about economic change – dynamic economies can of course change over time. Rather, it is the sense of intellectual struggle as a self-described ‘pragmatic Thatcherite’ attempts to spray a veneer of free market ideology over an economic course that more closely resembles her settlement’s death rites.

For what no government spokesperson has done so far this week is spell out all the trade-offs. Lower immigration can help drive higher wages – albeit somewhat haphazardly – and neither of these goals are, in and of themselves, particularly controversial to free market Tories. Yet tightening the supply side of the economy will also mean rising inflation and higher prices for consumers. It means, if key supply chains do ‘crumble’ as Chris Loder hopes, a greater role for the state in the direction of economic activity.  It may even mean a greater role for trade unions, or at least a tightening of labour market standards in those sectors affected by shortages. Throw in the fiscal doom-loop of our ageing population, the post-pandemic public finances and the deep unpopularity of austerity and it almost certainly also means a recipe for sustained higher taxes too – a move the Prime Minister, even after huge rises already this year, pointedly failed to rule out yesterday.

Every one of these dynamics has already been at play in the HGV labour crisis – higher wages, a debate about conditions, more state direction and, coming to a Christmas near you soon, higher prices. And make no mistake: for a boring old social democrat like me, there is much here to work with. But the most interesting question at conference this week is what Thatcherite-leaning Tories think about it all and will they do anything? The Prime Minister has never been anything less than clear-sighted that this is his mandate. But it feels hard to believe his Chancellor and Business Secretary feel the same.

Still, if there is one subject Boris Johnson is consistently right about it is the meaning of Brexit. Some Tory members may pine for a low tax, low financial regulation, ‘Singapore-on-sea’ model of Brexit (though even that moniker requires you to gloss over that country’s state-driven central planning). But, as the Prime Minister well knows, that was not the producer-interested, workers over consumers, protectionists over globalists Brexit that people actually voted for. To dream that Brexit could simply be reinvented post-hoc into something that lacks substantial support in the country is the stuff of political fantasy.

No, Brexit means Brexit and the clue really should have been there in who voted for it. Voters in the Red Wall have not had some latter-day conversion to Thatcherism – they have come to bury it. Equally – and unsurprisingly given it was her policy – the Thatcherite settlement depended to no little extent on the single market and the free movement of goods, capital and labour that came with it. The Government is thus right: the HGV shortages are a sign that Brexit is working. The catch is that it will destroy Conservative Britain as we know it.

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Alan Lockey is a former adviser to a Labour MP.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.