David and Helen are joined by Diane Coyle and Anand Menon to have another go at pinning down the long term consequences of Brexit. Now we have a deal, what are the prospects for rebalancing the UK economy? Do EU politicians want a post-Brexit UK to succeed or to fail? Can Labour really avoid re-opening the Brexit wars for the next four years? Plus, an update on the next series of History of Ideas.

Talking Points: 

Because of Brexit there is more friction in trade with the EU. 

• People will feel the friction more and more as we get back to normal volumes of trade.
• Right now the volume is relatively low both because of Covid and because of seasonal fluctuations (things slow down after the holidays).
• It will be hard to disentangle Brexit effects from Covid effects. 

We will be talking about Brexit for a long time.

• Future governments will be able to score easy economic wins by aligning more closely with the EU, although this may involve political trade offs. 
• This may not be true when it comes to financial services. 
• This trade agreement means that choices have to be made over and over again.

The British economy is taking two shocks: separating from the EU but also separating from what Osborne and Cameron called a golden era of UK-China economic relations.

• EU policy and British policy on China are diverging.
• The Uk government may focus more on India and other non-Chinese Pacific economies.

Brexit does create some opportunities.

• The UK is a world leader in AI, and there is a commitment to investing in energy technology, especially green energy.
• The UK is also a world leader in higher education and the creative sector; the problem is that the government has declared a sort of culture war.

A German-led EU tends to treat geopolitical questions as primarily economic questions rather than long-term security questions. 

• China is going to put that commitment, formalized in the China Investment pact, to the test.
• Britain is now the liberal European state when it comes to foreign policy.
• The institutions that have been so successful at managing intra-European imbalances now prevent the EU from being an effective actor in international relations.

Mentioned in this Episode:

• Johnson’s piece for The Financial Times on green energy
• Anand on the HuffPo podcast with Rosie Duffield
• The UK in a Changing Europe
• ‘Who Killed Soft Brexit?’ Jill Rutter and Anand for Prospect

Further Learning: 

• EU and China agree new investment treaty (from the FT)
• More on Germany and EU politics on China

And as ever, recommended reading curated by our friends at the LRB can be found here: lrb.co.uk/talking