In the space of 24 hours I have read one article about a cross-party meeting on limiting Brexit damage and another about Rishi Sunak wanting to “rebuild UK’s relations with the EU”.
Why now, all of a sudden?
Bloomberg says: “Russia’s invasion of Ukraine.”
I don’t buy it.
Surely we heard about the invasion 12 months ago? Took a long time thinking about it then…
Maybe it’s because the IEA cell (Truss, Kwarteng, Raab, Braverman, Javid, Sharp) are self-destructing so fast he now feels strong enough to move?
But I think it’s something else…
I think it is this:
Biden’s Inflation Reduction Act and – crucially – the EU’s response to it.
Basically, Biden is going to throw $369Bn of tax breaks at US Green Tech AND whack up huge barriers to overseas competitors.
“That’s not fair!” Tough.
The EU’s response (finally) appears to be:
A. massive de-regulation to speed up development of Green Tech;
B. changes to state aid rules to permit huge tax breaks / subsidies / investment;
C. skills training;
D. trade deals: Australia, New Zealand, Mexico.
Obviously the EU’s response is aimed squarely at Biden’s policy – I doubt if little UK even crossed their minds – but at a stroke it removes the one, pitifully slim, silver lining on the Brexit cumulonimbus.
“Nimble regulation, changes to state aid, new trade deals” Familiar?
Yup: the EU have snatched away the one Brexit straw we were still clutching at.
It also leaves Starmer’s strategy for “making Brexit work” in pieces on his Islington floor: it was based around the UK stealing a march on the EU & US in Green Tech.
Maybe Brexit deregulation and state aid relaxations WOULD have given us an edge in a rapidly-developing field, but everything has changed now … and suddenly.
The two sleeping giants have woken up and are about to crush us – probably without even noticing.
I reckon this is why the tectonic plates of Brexit policy are suddenly starting to shift.
The very last glimmer of a possible Brexit upside vanished last week when the EU responded to the Biden plan.
The only bright side for Sunak is it is much, much worse for Starmer.