This week in Brexitland, October 29th, 2021
The OBR makes it official: Brexit will be worse for the economy than even Covid
The crisis caused by Covid has had many negative results, one of them being to trigger an economic meltdown that has been unprecedented in any of our life times. Yet the Office for Budget Responsibility this week said that Brexit will be even worse for the economy than Covid, at least over the course of time.
There are several good articles on this point. One is written by Jonathan Portes in the Guardian (https://www.theguardian.com/commentisfree/2021/oct/28/economy-recovering-covid-brexit-eu). This phenomenon is relatively easy to explain, however. While Covid measures caused a massive slowdown in the British economy, it changed nothing structural within it. Basically, as a result of lockdowns, less stuff was made, less stuff was bought and so the economy went into reverse for a while. But as soon as you removed the Covid measures, the economy would be expected to go back to where it was pre-Covid and continue to grow as it would have without the crisis. This is roughly what we are seeing.
Brexit, on the other hand, is structural, not a one off. It has fundamentally changed the British economy for the worse. It has torn up supply chains, damage that cannot be undone any other way than by either creating new and better ones, or simply going back to the way things were before. This is why the long-term Covid hit to the economy is estimated by the OBR to be 2% - a one time hit caused by the crisis - but Brexit to be double that at 4%. Worse, unless Brexit gets us some game changing trade deals that off set this big hit, things could continue to get worse for ‘Global Britain’. The signs on this so far are poor.
The problems with the French continue to grow
A British scallop trawler has been detained by the French, causing the UK government to summon the French ambassador for a little chat about the escalating crisis in the Channel.
Brexiteers will point to this as an example of exactly why we had to leave. The French were only being civil to us because we were part of the EU. Now that we’ve left, they are showing their true, devious colours.
Remainers will point out that none of this would have happened without Brexit, which is obviously correct. I would only add here that at a time when the West faces many challenges, not least from an ever-more powerful China, we have Britain and France, two members of the UN Security Council no less, having a massive row about fish. I think we could all look back on this in a couple years time and throw about fiddling while Rome was burning metaphors. One of the worst things about Brexit is that it is distracting us from things that are actually important, all in the name of chasing some non-existent opportunity.
Polling suggests Brexit is now British public’s biggest concern
According to an IPSOS-Mori poll out out this week, Brexit is now the number one concern of the British public. Brexiteers are arguing that this number should be taken with a grain of salt - the poll actually shows a divided nation in terms of concern, with Brexit being on top, but with only 28% of people naming it as their biggest worry. Covid is on 27%, the economy on 26%. In other words, it’s all very close and Brexit just squeaked to the top in this one poll.
Except, I will respond to that by saying that Brexit shouldn’t even be on this list, never mind topping it. If Brexit was the settled will of the people, far less than 10% of the public, made up from hardcore FBPE types, would name Brexit as the country’s biggest worry. Particularly at a time of national crisis. Hell, 17% of Tory voters named it as the biggest problem the country faces at the moment. Wow. It all conforms to my theory that in December 2019, the country was sick of the debate and wanted to give Brexit a chance. However, they still expected something good to happen out of it all, or else they were happy to turn around and conclude Brexit was a bad idea. That we’re seeing signs of that already is pretty astonishing.
Until next week, folks, stay strong.