Brexit disaster is a warning against simple solutions to difficult problems | Richard Partington

MTraditional politicians are rarely direct. This is part of the reason their populist counterparts thrive: they tell it like it is. No nonsense. Let’s get things done. But last week, Alan Milburn had a blunt rebuttal: “Everyone takes the easy way out, right? You can’t just take the easy way out, okay? There are no easy solutions, guys. None. They’re all hard.”

Speaking at the launch of his review into Britain’s youth unemployment crisis, the former Labor minister argued that a fiscal U-turn could not solve a problem decades in the making.

But his comment could easily have applied elsewhere in the political landscape. It also comes at impeccable timing, just before the 10th anniversary of the ultimate populist silver bullet: Brexit.

Ten years ago, Britain faced a binary question that masked a deeply complex problem. Far from being the easy solution to the country’s ills promised by the Brexit campaign, Brexit has opened a Pandora’s box and imposed permanent negative costs on the economy.

According to the Stanford economist Nick Bloom and others, in an article written for the US National Bureau of Economic Research, the UK’s GDP per capita is up to 8% lower than it would have been in a business-as-usual scenario.

The reasons why Brexit was such a disaster testify to Milburn’s point: there are no easy solutions. Leaving the EU was not a panacea. It was complicated and messy, and involved years of hard work, culminating in a result with which no one is happy.

Bloom’s analysis highlights the damage caused by the years of political uncertainty triggered by the vote. Without a clear plan for what Brexit should be – never properly defined and often subjective – in practice, business investment froze, trade faltered and the economy stagnated.

As a result, investment is almost 18% lower than it would have been in the event of continuation, employment up to 4% lower and productivity up to 4% lower.

Those who say Brexit was botched may be right. But their arguments also evoke the “true communism has never been tried” response to the dystopia of Soviet Russia.

To achieve the benefits predicted by Brexit economists, Britain would have had to build a Singapore-on-Thames economic model, for which there was no majority public support.

The real supporters of Brexit are generally libertarian Atlanticists. Inspired by an American model of small, low-tax states, they wanted closer transatlantic ties and trade with fast-growing Asian economies. Freed from the rotting corpse of the EU, the message was that global Britain would prosper.

However, to get Brexit done, this group courted a much wider slice of the British electorate who wanted to kick the Westminster establishment and Brussels feathers, were fed up with austerity and worried about immigration.

This coalition has never been stable. Unlike libertarians, most Brexit voters were anti-globalists who, when push came to shove, were more comfortable with big government than might first appear.

Building Singapore on the Thames would have meant tax cuts incompatible with Britain’s already cash-strapped public services. Most Brexit voters wanted an extra £350 million a week for the NHS, not an even more destitute state.

A blaze of bureaucracy also failed to get off the ground: the abandonment of health rules inherited from the EU to authorize imports of hormone-treated beef and chlorinated chicken from the United States, to the detriment of British farmers, outraged most voters.

For manufacturers, duplicating production lines to follow separate rules in order to sell to 70 million Britons, compared to the EU’s 450 million, is a nightmare.

Geopolitics has also changed. The idea of ​​closer relations with the United States is now anathema under Donald Trump, and tensions with China and war in the Middle East have exposed serious weaknesses in global trade.

In this world, forging closer economic ties with close, politically aligned neighbors makes more and more sense. This prompted supporters to campaign for Britain’s return to the EU.

However, this idea is more complicated than it seems. As Danny Blanchflower, a former Bank of England policymaker – who is not a Brexit ally – told me: “People can’t say, ‘I want to rejoin.’ Under what conditions? It’s far too simplistic.

“Presumably it would take thousands of negotiators to talk to all EU citizens, about regulating gadgets, fish, qualifications and other things. You would have to do all that. It would be a major thing.”

Blanchflower says closer ties with the EU would be “a damn good start” to turning around the economy. But there is no miracle solution.

Part of the problem is the specter of Nigel Farage. Already, under Labour’s reset of the UK and EU, the prospect of a reformed government in the UK could undermine the benefits. Without certainty about the sustainability of a deal, business investment risks being withheld, stifling profits.

In addition to its relationship with the EU, Britain has other major economic problems to overcome, challenges that some economists fear politicians will struggle to confront head on due to short-term political priorities.

Milburn’s report highlights one of the most serious: the increase in youth unemployment and inactivity, which exceeds one million. Fixing this problem will require a “complete system reset,” he says, involving sweeping policy changes to schools, health, welfare and the labor market.

Politicians should follow Milburn’s mantra and be frank with voters. Change is difficult. As Blanchflower told me: “The moral of the Brexit story is simplicity, and the lack of experts is putting us in big trouble. And that’s where we are.”