This is the fourth story in a six-part series on the political and economic landscape facing Britain's new prime minister.
Boris Johnson began his resignation speech by proudly declaring that he got “Brexit done.” He left it to his successor to define what that means in practice.
The lines of trucks and holidaymakers backed up at the Channel Ports last week served as a reminder that many of the ramifications of leaving the European Union, long suppressed by the Covid pandemic, are only now beginning to be felt by voters and businesses at large.
Britain’s new prime minister will have to grapple with not just these practicalities of Brexit -- but a relationship with the bloc frayed by Johnson’s repeated threats to rewrite parts of the deal he signed, and an electorate showing signs of remorse about the vote to leave six years ago.
As Rishi Sunak and Liz Truss both vie for the backing of the ruling Conservative party’s overwhelmingly eurosceptic membership, there’s little sign either of them wants to reboot relations with the EU. Both blamed the delays at Dover on a shortage of French border staff. Officials in France pointed to the extra passport checks required after Brexit.
“Under the watchful eye of Conservative party members, there’s not going to be any divergence from Brexit as an ideological issue from either Sunak or Truss,” said Sophie Stowers, a researcher at the UK in a Changing Europe project at King’s College, London.
Both Truss, a remainer-turned-Brexiter, and Sunak, a longtime supporter of leaving the EU, have sought to woo party members by tackling some of their oldest bugbears. Each has promised to scrap EU-derived rules and regulations and limit the role of the European Court of Human Rights in immigration cases.
But the two are treading a balancing act. On one side, Brexit rhetoric serves as a way of re-energizing and re-uniting a party torn apart by Johnson’s ouster. On the other, the UK could miscalculate how far it can push the bloc without triggering a trade war with its biggest and nearest partner.
“They have to work out which trade-off is more important to them,” said Stowers.
Brexit is just one of the major challenges facing the next prime minister. This week, Bloomberg News is looking at the cost-of-living crisis, public-sector pay, the crisis facing the National Health Service, and what happened to Johnson's election promise to “level up” deprived parts of the country.
By far the most pressing Brexit test for Johnson’s successor remains the most intractable: Northern Ireland. When Johnson struck the deal to leave the bloc in 2019, he agreed to keep the province in the EU’s single market for goods to avoid imposing a hard border on the island of Ireland.
Unionists blame the protocol for disrupting trade and driving a wedge between them and the rest of the UK. Johnson has long called for the agreement to be rewritten as British firms face checks on goods moving into Northern Ireland and the supply of medicines to the province was threatened.
Last month, the UK government introduced legislation -- largely designed by Truss -- allowing ministers to override parts of the accord unilaterally -- a move that has prompted the EU to sue, raising the prospect of a trade war.
“Brexit is a project that’s seen as unfinished,” said Anton Spisak, a senior fellow at the Tony Blair Institute for Global Change who previously worked on the UK’s Brexit negotiations. “Completing it rests on dealing with the Northern Ireland Protocol.”
Other sticking points, like the UK’s participation in the EU’s Horizon scientific research program and an agreement on financial services firms’ access to the bloc “are paused until this single issue is resolved,” he added.
Spisak doesn’t anticipate a major change in direction if either Sunak or Truss becomes prime minister. But Truss’s determination to appeal to the hard-line Brexit-wing of the party “is seen very badly in Europe,” he said. “Sunak hasn’t been very engaged on Brexit, which means he has a cleaner start with regards to the relationship with the EU and trying to resolve the Northern Ireland question.”
Johnson’s successor will also have to grapple with the economic effects of Brexit. Trade barriers caused by leaving the bloc have hurt importers and exporters and, despite a sharp fall in the pound since the 2016 vote, there is little evidence to suggest businesses have benefited from increased competitiveness.
Analysis by Bloomberg Economics shows the UK lagged the trade performance of other big nations before the pandemic and has failed to fully share in the global trade rebound since then.
Brexit uncertainty has also unsettled executives, with business investment flat-lining since the 2016 vote. Sterling company bonds are on the longest losing run ever, while the cheapness of UK-listed companies relative to their EU peers has made them a target for takeovers.
A wider labor shortage in the UK has also hit supply chains, with the government playing catch-up to get more truck drivers on the road after supermarket shelves sat empty and some petrol stations ran out of fuel last year. And more disruption to trade is to come: full post-Brexit border checks on imports from the EU, like health and safety inspections of agri-food products, are due to be introduced at the end of next year. The UK has delayed the checks four times, after concluding they would have added £1 billion in annual costs for companies.
In the long term, the toughest challenge for Johnson's successor may be to persuade the wider British electorate that Brexit is worth the disruption and economic upheaval. While Tory party members overwhelmingly support leaving the EU, YouGov polling shows a majority of all voters think that Brexit is going badly. The threat for Truss or Sunak is that electors blame any prolonged economic pain on Brexit and -- by extension -- the political leaders who supported it.
Read more in the series:
- The 150% Energy-Price Shock Waiting for the Next UK Leader
- Strike Threats Leave Next UK Leader Facing Winter of Discontent
- Next UK Leader Will Get Broken Health System Johnson Didn’t Fix
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