The movement to build a Brexit wall

By Anthony Faiola

Dairy farmer Robert Martin, 47, on his farm in Carlisle, England, was initially against Brexit, but now supports it. Photo / Washington Post
Dairy farmer Robert Martin, 47, on his farm in Carlisle, England, was initially against Brexit, but now supports it. Photo / Washington Post

When Britain voted to leave the European Union, dairy farmer Robert Martin was distraught. Generous EU subsidies were helping sustain his farm on an emerald-grassed patch of the English countryside. Goodbye Europe meant goodbye cash.

"We didn't have a plan B," he said.

But where he once saw catastrophe, Martin now sees opportunity. The break with Europe means Britain must completely rewrite its trade, industrial and agricultural policies. And many, including farmers, industrial leaders and politicians, see a chance to press the national government to do something it has largely resisted in the era of globalisation: step in to support domestic business.

The push is suddenly setting up Britain, the nation that sparked the Industrial Revolution, as a battleground of ideas over how and whether to right the wrongs of globalisation.

"We can preserve this," Martin said, gesturing toward his cows grazing languidly by a babbling brook.

"Import substitution. Buying British. We turned away from it, but we have an opportunity now."

Three decades ago, British Prime Minister Margaret Thatcher moved to extricate government from industry, ending years in which inefficient businesses limped along with the aid of public cash. Much like in the United States, services here are now king. Banking thrived, and factories closed. Imports and cutthroat retailing hit local farms. Since 2000, nearly 5,000 British dairy farmers have gone belly up.

But like support for Donald Trump - who in a tweet this month described himself as "Mr. Brexit" - the British vote to leave the EU was propelled in part by those feeling the pain of globalisation. Even some like Martin - who voted to stay in Europe - say Brexit might provide British agriculture and industry with a second wind.

We also need a plan to drive growth up and down the country, from rural areas to our great cities.
Britain Prime Minister Theresa May

Here's why: EU rules make it relatively harder for member states to shield their domestic industries from competition. But now that Britain is preparing to exit, proponents argue that London will no longer be facing as many constraints. It should therefore start to take action, they say, to rejuvenate economic activities as varied as farms and steel plants.

There are huge incentives for Britain to use restraint; it is already a highly globalised economy playing by world trade rules that it helped to shape. Nevertheless, pressure is growing on the government to roll out programs and rules that could once again help ailing sectors.

Britain Prime Minister Theresa May is already talking about something largely unmentioned for decades: an industrial policy that brings back the "Made in Britain" brand. Photo / AP
Britain Prime Minister Theresa May is already talking about something largely unmentioned for decades: an industrial policy that brings back the "Made in Britain" brand. Photo / AP

Some proponents are heartened by early signs that the new Conservative prime minister, Theresa May, may not be like "Thatcher the Milk Snatcher," as Britain's Iron Lady became known after nixing free milk at public schools. May is already talking about something largely unmentioned in the halls of power here for decades: an industrial policy that brings back the "Made in Britain" brand.

"We need a proper industrial strategy that focuses on improving productivity, rewarding hard-working people with higher wages and creating more opportunities for young people," May said last month before the launch of her new commission on industrial policy. She added, "We also need a plan to drive growth up and down the country, from rural areas to our great cities."

Yet she and her ministers have been far less clear on what exactly that means, and they are engaged in intensive talks with business leaders to form a plan. Industrial leaders and politicians are pushing her to consider a host of new measures.

Britain's Tenant Farmers Association is calling on May to embrace a range of demands, including requiring "public food procurement policies to favour British produced food."

Iain Wright, the influential chairman of the business select committee in the British Parliament, is floating a plan that would seemingly riff off the Buy American provisions in the United States - seeking to aid hard-hit British steel and metal works companies through a government build-out of bridges, roads and rail lines using British-made parts.

"I'm thinking about procurement as a way to drive prosperity, and steel is a good example," Wright said. "Steel is not an obsolete industry. It's needed now more than ever."

I'm not going to use the word protectionism; that's not what it is. I would use the word 'nurture.' We need to nurture British industry.
Terry Scuoler, CEO of EEF

Some suggestions go further. Terry Scuoler, chief executive of EEF, the lobbying body of Britain's manufacturers, said public hospitals could, for example, be incentivised to buy and distribute British-made pharmaceuticals.

"Our free-market openness . . . is worthy, and it has served Britain in the past," Scuoler said. "But a cultural reorientation in government is now needed, an understanding that there is a need to buy British-made content. There is a cultural change required here.

"I'm not going to use the word protectionism; that's not what it is," he continued. "I would use the word 'nurture.' We need to nurture British industry."

And yet, protectionism is exactly what some fear Britain is being pushed to embrace.

By breaking with the EU, Britain is already moving away from the freedom of mobility that once made the bloc perhaps the most globalised region in the world.

Moving to prop up domestic industry, critics say, could simply be repeating the errors of the 1960s and '70s, when government attempts to bolster failing factories not only burned through public funds but also created deep economic inefficiencies and simply did not work.

Tony Travers, a political expert at the London School of Economics, said May's call for a new industrial policy felt like a flashback. "Once you start talking like that, you are indeed talking about picking winners, subsidies to companies in parts of the country, and that does have a very '60s and '70s ring to it," he said.

By breaking with the EU, Britain is already moving away from the freedom of mobility that once made the bloc perhaps the most globalized region in the world. Photo / AP
By breaking with the EU, Britain is already moving away from the freedom of mobility that once made the bloc perhaps the most globalized region in the world. Photo / AP

Yet even before Britain voted to leave the EU, then-Prime Minister David Cameron - a strong free-marketeer - was taking fresh steps into the private sector. His government was moving toward a short-term injection of public cash to sweeten a deal for investors to take over a large but failing steel plant in Wales.

Others argue that Britain has so much to lose from outright protectionism that it is likely to reject the most contentious proposals. Some point to the resurgent British auto industry as a model - with public-private cooperation, including millions of pounds of public cash pumped into research and training, helping to fuel a major recovery in the sector. Even some proponents of measures to help ailing industry say government support should go only so far, to avoid a throwback to the uncompetitive businesses that public aid wrought in the pre-Thatcher era.

But farmers such as Martin are still waiting for long-term answers. Competition among British retailers, weak global commodity prices and cheaper, imported dairy products from Ireland have conspired to put more and more British dairy farmers out of business. Now, they say, they are facing another hit.

Britain's departure from the EU will rob British farmers of roughly US$3.5 billion a year in annual subsidies - subsidies that made up about 10 percent of Martin's annual revenue.

Although he employs three British workers, many other farmers hire migrant workers from Eastern Europe who could face new visa hurdles to work in Britain once it leaves the bloc. Some activists are also calling for any national farm subsidies that might replace lost EU funds to be linked to environmental improvements or the protection of rare species - measures with a potential to increase production costs.

The May administration has pledged that Britain will make up for lost EU farm subsidies until at least 2020. But because Britain may not even leave the EU until 2018 or 2019, farmers such as Martin say that is little consolation.

"They're talking about carrying us for two years?" he said. "That's less than one calving cycle. That's not going to do it, and I think they know it."

- Washington Post

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