THE lack of specifics from Donald Trump this week as he reiterated ebulliently his broad-brush desire to do a “big” post-Brexit trade deal with the UK contrasted starkly with yet more detailed hard evidence of the actual impact of deciding to leave the European Union.
It has been another demoralising week on the Brexit front.
The notion that most things could be up for sale in a struggling, post-Brexit Britain is difficult to shake, particularly with the US President seemingly signalling a view initially that the National Health Service might be on the table in any future transatlantic trade deal. Amid a storm prompted by his comments, during his high-profile visit to the UK, Mr Trump then appeared to row back on his remarks about the NHS.
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However, the whole debacle seemed a further good illustration of the extent to which the UK might find itself phenomenally vulnerable, in the wake of the extraordinary act of self-harm that is Brexit.
Given the mood music as hard-line Conservative leadership candidates strut their ideology, the Pet Shop Boys’ 1987 track, Shopping, about the Tory privatisation spree, would seem to be an apposite soundtrack. It goes like this: “We’re buying and selling your history…Our gain is your loss, that’s the price you pay. I heard it in the House of Commons: everything’s for sale.”
Thankfully, this time round, the Tories’ grip on the House of Commons is much weaker than it was in 1987. And the House of Commons would, as the Tory leadership contest circus gets into full swing, appear to be the best hope of preventing a no-deal or another form of hard Brexit that would cost the population so much money.
A campaign video released by former foreign secretary Boris Johnson, a frontrunner in the Tory leadership contest, shows him telling a member of the public: “If I get in we’ll come out, deal or no deal, on October the 31st.”
Throwing in his tuppenceworth, Mr Trump said Mr Johnson would do a “very good job” of leading the UK.
It surely has been another week of the soundbite. Mr Johnson’s declaration in his campaign video might be viewed by some as indicating that a no-deal Brexit would not be much of a problem. We must guard against the forming of such an impression at all costs. After all, it would be people’s living standards that would be hit so hard in such a scenario, as even the UK Government’s own projections show.
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We have also had Mr Trump declaring he turned down a meeting with Jeremy Corbyn, and describing the Labour leader as “somewhat of a negative force”.
Mr Trump said: “I really don’t like critics as much as I like and respect people that get things done.”
Thankfully, a critical UK business community is continuing to proclaim loudly that it does not want anyone to get a no-deal Brexit done. A good majority of the electorate appears to hold the same view.
Fears of a no-deal Brexit, and its impact on the UK economy, have been weighing heavily on sterling. The euro has risen sharply, from around 85p in early May to within touching distance of 90p. Sterling continues to struggle against the US currency, trading around $1.27.
The pound did not appear to react in any significant way to Mr Trump’s talk of a big trade deal between the US and UK. Given the lack of any detail, and the fact it has all been said before with no sign of anything concrete emerging, the lack of any fillip to sterling from the US President’s enthusiastic talk should come as no surprise to anyone.
Sterling also appears to have been weighed down by Tory leadership candidates’ scary attempts to outdo each other in stating how willing they would be to take the country down a hard-Brexit route.
All the while, the grim realities of the Brexit vote, before we even get to the actual exit, manifest themselves relentlessly. Sadly, however, they continue to be lost on many Brexit voters, in these shallow days in which the soundbites take precedence over the hard facts.
The weakness of the UK manufacturing sector has been underlined by yet another survey this week. The Brexiters might have been hoping the plunge in the pound, which was trading close to $1.50 on June 23, 2016, ahead of the EU membership referendum result, might have boosted manufacturing exports and provided some window-dressing for their ill-judged Leave wheeze. This has not been the case.
The sector received a modest and temporary boost from dramatic stockpiling ahead of the previously planned Brexit date of March 29 but its underlying woes have been flagged by the Chartered Institute of Procurement & Supply survey.
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UK manufacturing went into reverse in May, recording its sharpest month-on-month contraction since the immediate aftermath of the 2016 Brexit vote, the survey showed. Overall new orders fell at one of the fastest rates recorded over the past six-and-a-half years. UK construction activity declined in May, according to another CIPS survey this week. Services sector growth picked up slightly, but remained modest.
Chris Williamson, chief business economist at CIPS survey compiler IHS Markit, concluded the UK economy “remained broadly stagnant midway through the second quarter”. He noted: “Companies reported that activity, order books and hiring trends were subdued by a combination of weak demand and Brexit-related uncertainty.” This miserable reality is at odds with near-euphoria about UK prospects emanating from Brexit die-hards in the Tory leadership contest.
Reports this week from Ernst & Young showed the number of foreign direct investment projects secured by Scotland and the UK as a whole fell sharply last year, by 19 per cent and 13% respectively to 94 and 1,054, with Brexit cited as a key factor. Scotland remained the second-top location for FDI projects in the UK last year, behind London. Ally Scott, who takes over as EY’s managing partner north of the Border on July 1, says Scotland is “standing tall in a challenging UK-wide environment to secure inward investment, set against an unsettled European economic landscape”.
It is good to see Scotland, which voted firmly to remain in the EU, proving so resilient. However, it is a sad situation that Scotland has to battle headwinds created by other parts of the UK. And there is a major worry that Scotland could yet have the legs kicked out from under it by the no-deal Brexit brigade.
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