The Double-Wicked Challenge Articles

The Double-Wicked Challenge: COVID and Brexit

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Competence, Character and Boiling Frogs –
Is Britain now a country “too exhausted to care”?

Matthew Gwyther reports on the first in a new season of Ahead of the Curves discussions, curated by Jericho on behalf of Stifel Europe and CEO, Eithne O’Leary. Having tackled the future of the professions and the social impact of Big Tech. in seasons one and two, the latest series turns its attention to the “double-wicked” challenge of COVID and Brexit… and what happens next.


Credit: / The Economist

The UK has endured a good few anni horribiles down the years. But 2020 – the year during which “going viral” took on its new, unhappy meaning – must be one of the worst. It was the year of COVID-19 but also the year in which the populist, viral effects of not just the 2016 referendum campaign but also last year’s ‘Get Brexit Done’ General Election finally began to bear their poison fruits. However, we are less than three weeks away from final departure from the EU and there is still no idea of what our Brave New World of sovereign freedom might entail. And meanwhile, thanks to the effects of the pandemic, the British economy is on a ventilator.

The way in which COVID has been managed in the UK has been poor. The lack of precision, clear leadership and some outright bungling –  possibly even corrupt procurement –  has left many questioning the judgement and competence of the current government. The sums of money that have been borrowed to shore up employment and the economy are frightening. Track & Trace under the leadership of Dido Harding hasn’t worked. The negative effects of Dominic Cummings’s trip to Barnard Castle cannot be overestimated and still reverberate. No nation finds hypocrisy among its leaders harder to stomach than the British.

The decline in UK GDP has been more grave than any other European country. If the new vaccines come on stream as fast as appears possible, it is still hard to see behaviours and economic activity returning to anything like normal before next Summer. This is no time to be subjecting the nation to a further existential economic threat from its closest and largest trading partner, which is finding little to trust when seated across a negotiating table from UK representatives. Britain appears slippery and perfidious.

The ex-chancellor of the Exchequer, George Osborne – who has admitted in the past he was “not keen” on holding an EU referendum and had only gone along with it to support David Cameron – says Britons now resemble a boiled frog. “We’re so focused on the last obstacles to a final deal, that we haven’t noticed how uncomfortable our surroundings have become. Each step Britain has taken in the post-referendum world has been in the direction of a hard Brexit. We now face a rupture with our closest neighbours that only a small minority of a small majority would have supported back in 2016.

“We’re out of the single market that Margaret Thatcher pioneered; out of the customs union too, with 50,000 new customs officers and lorry parks in Kent to show for it. None of that was inevitable four years ago — indeed many of the most prominent supporters of Brexit said the reverse. Yes, if there’s a last-minute deal there will be no tariffs on manufactured goods — but there is no trade agreement at all on the services industries like finance that make up 80 per cent of the UK economy.

“The country is too exhausted to care.”

“Like a frog, if we had been thrown straight into the hot water back then, we would have jumped out — or perhaps never jumped in. But slowly, via internal Tory battles and Labour miscalculations, leadership changes and elections, we’ve reached a world where January 1st  2021 will mark the largest act of protectionism in our history. The country is too exhausted to care.”


It remains still very unclear precisely what Brexit enthusiasts actually want. The psychodrama within the Conservative party about Europe has been going on for decades but exactly what their desired outcome is opaque. It is perfectly clear what they wish to get away from – the threat of a Federal Europe and uncontrolled borders when it comes to inward Euro migration  – but where the journey ends, in a Singapore-on -Sea or a United Kingdom minus Scotland plus Northern Ireland (whose departure from the Union is now far more likely than it was in 2015)  is anyone’s guess. And that uncertainty is what UK business finds it very difficult to live with.

The economics and politics of Brexit have always pulled in opposite directions. A big part of the argument for leaving the EU was that it would set Britain free from Brussels red tape that burdened us with too many unnecessary regulations and shut out trade from those who were not members of the bloc. However, it appears more likely that we will raise standards and tighten regulations rather than loosen them. This has already happened, for example, in the banning of live export of animals from the UK. There is climate change to deal with, in which we wish to move faster than anyone else in Europe.

Credit: @Royaards / The Cartoon Movement

As the temperature in the frog’s water has increased, many have missed or chosen to ignore the fact that according to the Office for Budget Responsibility, a no-deal finale to the year’s diplomatic drama would instantly slash a sorely needed 2 per cent off GDP in 2021. That can hardly be construed as an ideal context for Rishi Sunak’s strategy to repair the COVID-scarred economy. It was noticeable during Sunak’s December statement that while the ravages caused by COVID were extensively dealt with, no mention was made of the adverse effects of Brexit.

Yet here is the figure that often gets overlooked: the OBR forecasts a long-run 4 per cent decline in GDP even if Johnson does get a trade deal. In other words, the economic options ahead of the UK appear to be: (a) bad or (b) worse.

This matters enormously because of the way Brexit has been “framed” – to use a popular phrase – since the 2016 referendum. We have become habituated to considering a choice between “hard” and “soft” versions of departure, between a sharp breach and continued collaboration. And neither option was ever “oven ready.” In reality, however, that choice vanished when Johnson became Prime Minister – perhaps earlier, given the narrowing range of options available to the hapless Theresa May. The Brexit choices available today are “hard” and “harder”.

Excuses will have to be made. As Professor John Van Reenan of the LSE – who is interviewed in the podcast accompanying this roundtable discussion – wrote in a recent blog:  “A No Deal is painful because it hits like a tsunami immediately. A Hard Brexit Deal is stealthier, domestically abusing the economy over decades. Many government ministers believe COVID makes Brexit easier because the pandemic’s pain will swamp that of the stake driven into our European relations. It is true that when five thugs have given the UK economy a good kicking, we will feel the blows from the sixth less keenly; especially as the pain will be distributed more democratically across our sectoral limbs (Brexit whacking manufacturing and finance; COVID sickening hospitality and tourism).

“The long-run economic costs of Brexit will likely be over twice as large as that of COVID and possible trade deals are no vaccine.”

Professor John Van Reenan

“But why welcome further pain when the viral consequences of “long Brexit” will be more persistent? The long-run economic costs of Brexit will likely be over twice as large as that of COVID and possible trade deals are no vaccine – the government’s own analysis suggests that any positive impacts will be small. Geography still matters when it comes to trade, and even Johnson cannot geologically shift Britain’s location.”


With this as a background, Jericho Chambers convened its final roundtable discussion of the year in early December. To say that the mood was sombre would be accurate. In the scores of roundtable discussions that Jericho has held over recent years, both face-to-face and online, the general feeling has rarely been more angry or disappointed.

“How prioritising the UK’s fishing industry over financial services will help the tax base which will be in sore need of revenue in the next years to come, I simply do not know.”

Eithne O’Leary

Eithne O’Leary, the President of Stifel Europe who supports this strand of Jericho’s work, opened the discussion: “Many in business are going to find it hard to summon up reserves of energy to deal with Brexit after COVID. It has been a long and exhausting year for many in business simply to remain up and running. It is hard not to be unimpressed by competence levels in an administration which appears to value ideology above competence. How prioritising the UK’s fishing industry over financial services will help the tax base which will be in sore need of revenue in the next years to come, I simply do not know.”

Vicky Pryce is a Greek by birth but has lived in the UK for many years. During the Great Crash she was Joint Head of the UK Government Economic Service (from 2007 to 2010). She knows a crisis when she sees one.

“The markets have shown that they are willing to trust the UK for the time being,” she said.” They trust the Bank of England. However, if post-COVID we see a bounce back and the release of a huge pent-up demand and inflation, that may well scare investors. Brexit will mean that HMG won’t be able to spend what it wants and need to spend. I fear the North/ South divide rather than experiencing the promised levelling-up, will get worse by the next election.” In which case there will be many from the Midland and North who voted Leave in 2016 and yes to the oven ready deal in 2019 who will require answers.

“We have the most incompetent administration we’ve ever seen.”

Baroness Patience Wheatcroft

Patience Wheatcroft, an ex-City and national newspaper editor and now Peer, again brought up the subject of basic competence. “We have the most incompetent administration we’ve ever seen. The cabinet is the least experienced and we’re faced with these twin crises. Liz Truss [who triumphantly displayed a free trade agreement with Northern Macedonia the day after this discussion]  is its most experienced member. There is no end to their mistakes, whether it be in VIP channels for PPE contracts or the crisis in care homes. It’s the poorest 10% of our society who will suffer the most if food prices rise.”

“In our leadership we’ve mistakenly looked for ideology and charisma rather than competence and character.”

Jane McCormick

Jane McCormick, who recently stepped down as KPMG’s Global Head of Tax said: “In our leadership we’ve mistakenly looked for ideology and charisma rather than competence and character. But Brexit certainly isn’t the only thing going on geo-politically and other countries are preoccupied. We need to think about China as much as we think about Brexit and COVID.”

A more optimistic note was struck by Andrew Higginson who chairs the supermarket Morrisons. “My sector – supermarkets – has justifiably felt some pride over how it handled COVID. We had a clear and consistent message and approach and our teams went to work while many others remained at home. We had to be pragmatic because that’s how we operate. But it’s a slightly more scary world than this time last year.

“I was the Finance Director of the Burton Group [now part of the stricken Arcadia] in the 1990s ,so I regret what is now happening in the High Street. Pre-COVID, between seven and eight per cent of food shopping was online. That has now increased. And probably 80% of purchases of Sony 42” TVs are online – in that sector the economics have been transferred out of store.

“However, we all need to remember those among the British population who cannot shop via the internet. Those maybe with no family and no neighbours, they can ask for help. We opened a phone in line for such people and made 47 products available by phone. In delivering them we came across some of our fellow citizens who hadn’t eaten for 3 days and hadn’t even spoken to anyone for 3 weeks.

“Brexit was an amazing democratic exercise but what is the win for UK plc?”

Andrew Higginson

“I feel lockdown has been a blunt instrument and many during this second wave are disregarding the rules. But now we have to contend with Brexit which will be disruptive. At Morrisons, we’ve done much preparation to protect ourselves. We’ll get through it. The governance of the UK isn’t the government – HMG can bugger things up. I worry about the absence of a long term strategy. Brexit was an amazing democratic exercise but what is the win for UK plc? Where should we be placing our bets?”

Denise Kingsmill is a Labour peer in the House of Lords. Again, she was born outside the UK – in New Zealand – and came to Wales as a child. “I find the self-destructive behaviour of the government astonishing. It’s the impact on employment that particularly preoccupies me. I’m pessimistic about our prospects. What is happening in Scotland is worrying for the stability of the Union. But what’s worse is that Brexit is really only of core interest to us. Other nations have much else to worry about. But their opinion of the UK is lessened – we risk losing our standing in the world.”


On 12 March of 2019 Steve Double, the MP for St Austell & Newquay, described the deal his then Prime Minister Theresa May had negotiated thus: “This is a turd of a deal, which has now been taken away and polished, and is now a polished turd. But it might be the best turd that we’ve got.” The following day he uttered: “I voted for the Withdrawal Agreement yesterday to try and save Brexit from possible oblivion or being kicked into the long grass.”

If the deal in 2019 was indeed a pile of ordure – in or out of the grass – then it’s hard to describe what we have now. Historians in years to come will have a field day in making sense of how we landed here. Or maybe it will simply be analysed as yet another downward jolt on a journey that probably started feeling the adverse effects of gravity in 1913. Who knows?  “Hop off you Frogs!” entreated The Sun back in 1984 over a lamb import war with the French. The Sun has had its day – but it’s our frog that is getting boiled now.


This roundtable and podcast series is part of Jericho’s The Double-Wicked Challenge ; COVID and Brexit programme, generously supported by Stifel Europe.

For further information or to get involved, please contact Jericho Founder, Robert Phillips or Programme Director, Becky Holloway.


Participants in the Roundtable included:

  • Claer Barrett, Consumer Editor, Financial Times
  • Matthew Gwyther, Partner, Jericho Chambers
  • Andrew Higginson, Chair, Morrisons
  • Wendy Jephson, Head of Research & Ideation – Market Technology, Nasdaq
  • Baroness Denise Kingsmill CBE, Chair, Non-Executive Director and Board Advisor
  • Jane McCormick, Former Head of Global Tax, KPMG
  • Simon McDougall, Deputy Commissioner – Regulatory Innovation and Technology, ICO
  • Eithne O’Leary, CEO, Stifel Europe
  • Robert Phillips, Founder, Jericho Chambers
  • Vicky Pryce, Economist and Business Consultant, Board Member Cebr
  • Lesley Smith, Vice President Corporate Communications & Public Affairs, Revolut
  • Ruth Sunderland, Business Editor, The Daily Mail
  • Chi Onwurah, Labour MP for Newcastle upon Tyne Central, Shadow Minister Digital, Science & Technology
  • Baroness Patience Wheatcroft, Member House of Lords

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