• The eurozone is experiencing Brexit’s worst forecasts
  • The European Medicines Agency is paying the price
  • What is Brexit’s Covid-free counterfactual?

All of the worst predictions about Brexit are coming true, at last! We’re seeing mass protests by farmers clogging up roads. There’s popular demand for yet another change of prime minister and chaos at the Eurostar. Exporters are demanding exemptions from trade restrictions. The continuous threat of a recession just won’t abate. House prices are crashing. People are emigrating because of the end of freedom of movement. Brexiteers are defunding the BBC. And the list goes on…

Unfortunately, the mysterious delay aside, the doom-monger’s warnings seem to be playing out inside the eurozone instead of here in the UK…

German roads are being clogged up by vast numbers of farmers protesting their treatment. One spokesperson explained that taxes on agricultural diesel have broken the camel’s back. “These last few years we are only slaves of the bureaucracy,” he added of the famous red tape.

And the Germans are, of course, just the latest example of a trend that is practically a tradition in France, the Netherlands and Belgium. Common agriculture policies are never a good idea. One size doesn’t fit all.

Germans are so fed up with their government that two-thirds even want a new chancellor to lead them.

Should we tell them that this is unlikely to solve much in our experience?

Germany is even experiencing the plunging house prices that were famously forecasted for Brexit. The latest drop is the biggest on record – almost 10% in a year.

As for migration, the anticipated exodus of EU workers was replaced with a number of applications to remain in the UK that exceeded the number of EU migrants estimated to be in the UK in the first place. And now we hear that 337,000 EU citizens have become British citizens since Brexit. That’s a big chunk of the EU net migration figure…

Over in Poland, the new pro-EU government fulfilled Remainers’ worst nightmare: the government taking the state-funded broadcaster off air…

Even Brexit’s more established disastrous consequences are getting a face lift that makes the eurozone look like it Brexited instead of us. The UK is no longer the worst performer in the G7 when it comes to Covid recovery. Revisions allowed us to leapfrog Germany and France, just coincidentally.

What about the Brexit-doomed economic outlook? Well, a purchasing managers’ index is a measure of business optimism. Not the typical Brexit doom-mongering survey of cheap opinions, but actual business conditions. Once you measure where businesses are putting their money rather than their mouth, the eurozone is in a recessionary 47.6 and the UK is on an expansionary measure of 52.1.

So, the list of Brexit predictions that are coming true is a long one. It’s just that the forecasters got their locations wrong. It’s the eurozone that is struggling with Brexit-sized problems instead of the UK.

But some of the stories coming out of the EU couldn’t even have been dreamed up by Nigel Farage in 2015. My favourite is this cracker from the Telegraph – an early contender for the funniest story of the year.

It’s all about how the European Medicines Agency (EMA) is having a little trouble with its office spaces. The EMA’s lease on its abandoned London offices, ironically at an address called Churchill Place, had been sublet by WeWork. But WeWork’s bankruptcy means that the EU is now back on the hook for the lease. That’s another 16 years at a cost of £373 million, unless it finds a replacement tenant.

The £27 million bill for this year is already causing trouble for the EU’s EMA budget, with MEPs set to decide on whether to fund the first £4.55 million for this quarter.

The good news is that the EMA’s staffers will soon have a convenient place to… err… drown their funding sorrows. A multi-story brothel is set to be built near its new offices in Amsterdam, with 100 new “work spaces” available in 2031, if approved.

Well done to Joe Barnes from the Telegraph for this story. But on to more serious matters, because Brexit is far from a glowing success, whatever the comparative statistics might say about the EU…

One key aspect of Brexit, which we repeatedly emphasised in our editorial, is that Brexit would mean that we are free to make our own mistakes. Which probably sounds a bit stupid. But the idea was that such mistakes would lead to accountability at the ballot box – something missing from the EU. Of course, the accountability would lead to better government policies over time by incentivising them.

And the government has been busy proving us right… when it comes to making our own mistakes. Ironically, they’re the same sorts of mistakes that the EU likes to make…

Consider the UK’s import rules. Demanding that previously accepted EU goods be inspected and tested in the UK is a complete waste of time. But instead of accepting testing in the EU, or even EU standards, or just EU products more generally, the government just keeps on extending temporary measures to avoid the obvious chaos that would result from actually enforcing ridiculous British regulations.

To some people, this demonstrates the obvious folly of leaving the EU. To me, it finally exposes what terrible policies our governments impose for no good reason. And that is a recipe for change for the better: getting rid of those rules.

If “the number of steps to import a petunia had increased from 19 to 59 since the UK left the EU,” as the Horticultural Trades Association chair says, then the problem and the solution are entirely obvious. Chrysanthemums, carnations and orchids have not become “medium-risk” because of Brexit. Unless you think British import rules trump biological reality.

If constantly renewed temporary extensions of exemptions to import rules don’t put the country at risk of… over-flowering, then those import rules are not necessary in the first place. As they weren’t when we were inside the EU.

If we had wanted stupid regulations to tie up our economy, remaining inside the EU would’ve been quite a good idea. The point of leaving is that we can get rid of them.

But will we?

Well, continuously extending exemptions on bad policies that risk being exposed by Brexit also prevents accountability from clipping MPs around the ears. The force that actually leads to those rules being changed or abolished is delayed alongside the rules. And so, we seem to be stuck in the Brexit doldrums, where the government doesn’t actually cut red tape. It just keeps loopholes open.

The reason I raise all of this is that the growing consensus on Brexit is a bit misguided. Let’s look at an example from the Guardian’s economics editor for an example of how.

The article is about how Brexit is no longer a topic in Westminster because the test for whether Brexit was a failure hasn’t been passed:

But any successful campaign would need to do two things: convince voters that the UK economy had become a basket case since the Brexit vote and that life for those still in the club was so much better.

Neither criterion has been met.

He then goes on to detail how the UK has done OK, especially compared to the eurozone. Fine.

But is that the right test? Shouldn’t our measure of whether Brexit was a good idea be a comparison between how we have fared and how we would’ve fared inside the EU instead?

I mean, it’s perfectly plausible to me that the economic performance of the UK would’ve been pretty much identical inside and outside the EU over the past eight years. It’s not like we’ve diverged much in terms of policies related to Brexit.

Inflation has been a global phenomenon. So have Covid and immigration spikes too. What if Brexit has made no measurable difference at the aggregate level? Wouldn’t that be ironic…

To figure out the impact of Brexit, you must be able to point at things that Brexit has actually changed. There are precious few with a noticeable impact.

All of this begs an important question that should define Brexit politics, but it isn’t even being asked in articles like that from the Guardian. And they’re avoiding it for good reason: in the less scientific sciences, you never know the counterfactual…

A physics experiment can be conducted in a way that demonstrates a clear conclusion. Add salt to your concoction and see what happens. Then compare this to your salt-free concoction and you can establish what effect adding salt has. This works because nothing else has changed – you just added salt.

Economics and politics happen in the dynamic real world, where everything is constantly changing. You cannot establish whether lowering tax rates increases or decreases total tax revenue because tax revenue would’ve changed for countless other reasons anyway. Perhaps the tax cuts grew the economy so much that they raised overall revenue. Theoretically, this should only be a matter of time. But time only introduces even more uncertainties.

So, we’ll never know what impact Brexit had.

Despite this lack of scientific accuracy, I want to ask you a question: if Covid hadn’t happened, how would the UK have diverged from the EU thanks to Brexit?

Would we have cut all the red tape? Would we have imposed border controls on things that we had only recently allowed in unquestioned? Would migration policy have changed?

And what would’ve been the consequences of these divergences, if any?

Would house prices have fallen? Would there have been a recession? How would immigration have looked?

Despite all this uncertainty, what we do know is how all this debate and drama is increasingly making people realise that they cannot trust governments to have their best interests at heart. We just don’t have the lobbyists…

Brexit, Covid and then inflation highlighted where trust in the government leads you.

But what if there was an alternative? A way out of the government-controlled financial system?

Do you think it would be popular in the aftermath of governments being exposed? Then click here.

Until next time,


Nick Hubble
Editor, Fortune & Freedom