IN a year dominated by the developing Brexit catastrophe, one description of the UK’s drive to leave the European Union stood out even in the spate of suitably exasperated comments on this huge shambles.
The description came from Professor Sir Anton Muscatelli, Principal of the University of Glasgow.
He warned in early October at a Brexit summit organised by Glasgow City Council that a hard Brexit that took the UK out of the single market and customs union would be “the most unhinged example of national self-sabotage in living memory”.
Prime Minister Theresa May ruled out staying in the single market and customs union surprisingly, ill-advisedly and lamentably early in the Brexit process.
Under the exit deal negotiated between the UK and EU, which Mrs May felt unable to put before Parliament on December 11 with all the signs suggesting she would be defeated in such a vote, the country would leave the single market.
This deal will now not be voted on in Parliament until mid-January. And who knows if the date might change again?
Experts have highlighted the significantly detrimental impact on the UK economy of leaving the EU under the terms of the deal championed by Mrs May.
While many in the business community appear nevertheless to be relatively unopposed to this draft withdrawal agreement, this seems to be mainly because of the fear that a no-deal scenario could be the alternative.
The Bank of England has warned of a potential eight per cent plunge in UK gross domestic product – worse than that triggered by the global financial crisis – in the event of a disorderly Brexit. The Bank has flagged the danger of a 30% drop in house prices, a 25% plunge in sterling, and a surge in unemployment, currently 4.1%, to 7.5% in such a scenario.
According to the Westminster Government’s own projections, the deal negotiated by Mrs May would result in UK GDP in 15 years’ time being between 1.9% and 3.1% lower than if the UK were to stay in the EU, on the basis that there are zero net inflows to the country of workers from nations in the European Economic Area. We must not lose sight of the fact that this would still be major damage. The UK Government’s forecasts show that economic output in 15 years’ time would, under a no-deal scenario, be up to 10.7% lower than it would if the country were to stay in the EU.
“Unhinged self-sabotage” therefore seems a most apposite description of the determination of the UK Government to leave the EU single market.
A year ago, this weekly Called to Account column bore the headline: Government fails to grasp Brexit gravity as it panders to populism. Another year has passed and there is no sign the UK Government is any closer to recognising the gravity of the country’s predicament.
Even taking into account the Conservatives’ woeful performance on the economy since they came to power in 2010, and the Brexit omnishambles, it is still remarkable that this UK Government does not appear to recognise what lies ahead and take evasive action. Especially given the slew of new forecasts and warnings there have been over the past 12 months on the impact of Brexit under the various scenarios and the very damaging drag on UK economic growth, caused by the move to leave the EU, which has continued through this year. In this regard, there is no rational basis for no-deal being the alternative to Mrs May’s agreement. What about no exit instead?
Business investment continues to be weighed down by the huge economic and political uncertainty triggered by the UK electorate’s monumentally ill-judged Brexit vote in June 2016.
And the warnings over Brexit from big overseas investors in the UK, such as car manufacturing giants Nissan and BMW, have come thick and fast this year, as the clock has ticked and the uncertainty has intensified.
Net immigration from other EU countries to the UK continues to tumble. This is hardly surprising, given the message being sent by the UK to our European neighbours. And the Tories are determined to cut immigration further, as highlighted in their lamentable white paper on this issue last week.
People from other EU countries play a crucial role in the UK’s economy and society. And, given the UK’s demographic challenges, the last thing its economy needs, in spite of what the Brexiters might tell you, is a reduced flow of immigration from elsewhere in the EU. Scotland will feel the effect of the Tories' foolishness on immigration especially acutely, which seems particularly unjust given its electorate voted firmly to remain in the EU.
Many citizens of other EU countries have already left the UK to live and work in other nations in the bloc because of Brexit and all the uncertainty it has created.
It is worth noting that, as well as people naturally wishing to live in countries in which their long-term status is certain, the pound’s sorry Brexit-induced tumble has also made the earnings of people from other EU countries employed in the UK worth much less in euro terms.
This factor has been flagged by Paul Sheerin, the chief executive of industry body Scottish Engineering, among others.
Mr Sheerin warned last month: “There is no doubt that the first negative signs of Brexit have been felt by companies losing EU nationals from their workforce as they avoid uncertainty or the effects of weak sterling and return home.”
He was among those who summed up the Brexit fiasco well during the year, declaring back in August: “Three months ago, I described the Brexit progress as shambolic. Today I feel that a better description is chaotic and, given that we are more than two years down this road, with a total absence of clarity or meaningful progress, maybe it’s time to consider that this chaos might be here to stay for a while.”
The chaos has certainly prevailed during the remainder of the year. And it is fair to say that, while this current period of Conservative rule has been characterised by unreliability, there has been one thing on which we have all been able to rely from the Tories: Brexit chaos.
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