Britain’s obsession with sovereignty is hurting the economy

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Britain’s obsession with sovereignty to the exclusion of virtually all other considerations, including economic benefit, is a constant source of astonishment to European negotiators, which in itself perhaps demonstrates how little they understand the policy of Euroscepticism. Until they have to face their own constituents.

Now that he’s a French presidential candidate, Michel Barnier, the EU’s former chief Brexit negotiator, is apparently as hostile to the ECJ as Lord Frost and Johnson.

“We must recover our legal sovereignty so that we are no longer subject to judgments of the European Court of Justice or the European Court of Human Rights,” Barnier told French voters in the midst of the electoral campaign. Ridiculous. Looks like suspicion of the ECJ rule extends far beyond UK borders.

With everything going on, you’d expect international capital to be avoiding Britain like the plague already. Yet, perhaps strangely, and much to the relief of HM Treasury – who must constantly worry about how to finance Britain’s dual budget and trade deficit – there isn’t much evidence of this.

The number of foreign direct investment projects declined significantly last year, but not as much as one might expect given the ravages of Covid. In terms of numbers, Britain is still tied with France and Germany.

According to an EY survey, furthermore, Britain this year regained first place as Europe’s most attractive investment destination, helped, it seems, by the advance it acquired in the deployment of vaccines.

These discoveries certainly predate the scenes of chaos on British courtyards, the energy crisis, staff shortages, empty supermarket shelves and the latest deterioration in relations with the EU; but even so, confidence in the UK economy remains remarkably resilient. It’s kind of a testament to the UK’s underlying strengths.

Yet if things continue as they are, it will inevitably take its toll. None of the supply chain tensions plaguing the UK economy are unique to Britain. They are very comprehensive in nature.

But the fact of not adequately preparing for the break with Europe has undoubtedly made them worse here than elsewhere.

Cold turkey can have its merits. But these are big changes, both in the structure of the labor market and in the way we trade goods with the continent, and they have not been properly thought out or planned.

Hope, as they say, is not a strategy.


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