The current British government’s pursuit of a trade deal with the US, while simultaneously attempting to “make Brexit work,” is a self-deceptive endeavor echoing Walter Scott’s warning about the tangled web of deception. This mirrors a similar self-deception within the Labour party, particularly regarding their taxation policies. Like Harold Wilson’s ill-fated decision to delay devaluation in 1964, Keir Starmer and Rachel Reeves dismissed the Institute for Fiscal Studies’ advice on necessary tax increases to fund their economic “mission.” The focus on a perceived “black hole” in the budget obscured the far greater issue: the economic damage wrought by a decade of austerity under the Cameron-Osborne government – a cynical political choice unlike the post-war austerity necessitated by the Attlee government.
The current economic stagnation, following boasts of rapid growth, further underscores the government’s flawed approach. While tax increases without corresponding public spending would be detrimental, such increases financing a boost to public services and economic demand could offer a different prospect. However, a far more significant self-deception lies in the attempt to simultaneously revive growth and “make Brexit work.” The evidence overwhelmingly demonstrates Brexit’s negative impact. Increased border bureaucracy severely hinders small businesses, particularly those trading with the EU. The unnecessary complexities, such as double customs charges for wine imports, represent self-imposed economic harm, directly contradicting the government’s growth targets. A return to the customs union and single market would provide a much-needed boost to trade and growth on both sides of the Channel. The government’s attempts at a “reset” with the EU are insufficient; a genuine reset necessitates serious consideration of rejoining.
The hope of improved trade prospects through appointing Peter Mandelson as ambassador to Washington is unrealistic. His past record as an EU trade negotiator, while lauded, is not universally viewed as exceptionally effective. Furthermore, with the rise of Trump and the influence of figures like Elon Musk, the prospects of a strong US-UK relationship are questionable. The UK’s true “special relationship” for decades prior to the 2016 referendum was with the EU. Given current geopolitical instability, re-establishing strong ties with the EU is crucial for both parties. Superficial gestures are inadequate; a genuine “reset” requires a serious commitment to closer integration, even rejoining.
Finally, Labour’s fear of Nigel Farage should not hinder their response. Labour should directly address Farage’s role in the Brexit-related economic damage, exposing him as a political opportunist capitalizing on the very problems he helped create. This requires confronting the core issues harming the economy: austerity and Brexit, with Farage squarely responsible for the latter’s detrimental effects.