IT is easy to understand the business community’s entirely justified frustration over the UK’s protracted Brexit fiasco, as the country’s new Prime Minister takes office with a salute and a thumbs-up gesture.
However, it should be careful what it wishes for now.
For more than three years now under the Conservatives, usually regarded as the champions of business in terms of their economic and labour market policies, many, many companies in Scotland and across the UK have seen their planning and investment intentions thrown into disarray by the continuing uncertainty over Brexit.
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Business investment has been hammered, falling for four straight quarters during 2018, having not been in great shape before that.
UK growth meanwhile looks to have ground to a halt, or worse. The National Institute of Economic and Social Research has said this week that there is a one-in-four chance that the UK is already in technical recession in the current quarter, with the think-tank estimating UK gross domestic product will have fallen by 0.1% in the three months to June.
Official second-quarter GDP figures will be published next month.
The NIESR has flagged the lack of momentum in the UK economy in the current July to September quarter and thus the possibility of the UK meeting the definition of technical recession – two consecutive quarters of contraction.
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None of the myriad and major woes visited upon the UK by the Leave vote in the summer of 2016 – a result for which new leader Boris Johnson campaigned boisterously – seem to have taken the edge off his cheerfulness. Quite the opposite, it seems.
Liz Cameron, chief executive of Scottish Chambers of Commerce, made some very good points about the impact of Brexit uncertainty, the danger of a no-deal departure, and the need for a focus on economic growth, as she reacted on Tuesday to news that Mr Johnson had won the Tory leadership contest.
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She declared: “I cannot state this enough – businesses are demanding a government that can focus on policy and investment that will help us grow the economy for the benefit of all as we face an uncertain future.”
Ms Cameron also, quite rightly, told Mr Johnson that business communities across Scotland “need to know, in concrete terms, what your Government will do to avoid a messy, disorderly Brexit on the 31st of October”.
The business community’s determination to avoid a no-deal departure appears at odds with Mr Johnson’s seeming indifference to whether the UK leaves with an agreement and transition period or not. This is an indifference that appears rooted in ideology – it is not something which looks like a mere negotiating stance.
In a campaign video released last month, former foreign secretary Mr Johnson told a member of the public: “If I get in we’ll come out, deal or no deal, on October the 31st.”
Ms Cameron also observed this week that “the economy of Scotland and the UK is on a knife’s edge and any further rigmarole will risk the livelihoods of workers and employers”.
However, her appeal to Mr Johnson for “him and his parliamentary colleagues to get a grip of the role and the Brexit process” might be viewed by some as falling into the “be careful what you wish for” category. After all, the type of grip Mr Johnson has indicated he is interested in getting on the Brexit process would involve some form of hard departure. Even harder than that proposed by former prime minister Theresa May in her draft withdrawal agreement with the European Union.
Many Scottish voters, who let us not forget overall preferred by a big majority to stay in the EU in the 2016 vote, will with apparent justification see Mr Johnson as a man who wants to drag Scotland out of the EU by the scruff of its neck and against its will.
Sadly, there seems to be absolutely no prospect of Mr Johnson getting a grip on the Brexit process in the way that is actually needed. What is required is for a leader to take stock, see the damage already done and what is to come, and start moving towards abandonment of the whole process. The starting point might be a second referendum, or a long extension to or revocation of Article 50, but, whatever the mechanism, Mr Johnson would be better employed directing the “new spirit of can-do” he is touting to unpicking for good the mess the Leave camp has created.
Abandonment of Brexit would bring a swift end to the uncertainty that has plagued businesses and households for more than three years, and help boost economic output, albeit any uptick would be limited by the grim Tory austerity that has prevailed for nearly a decade.
Protracted uncertainty is bad for business. And there is perhaps some inbuilt psychological desire within the UK business community to see targets met, even when it comes to a Brexit that it opposed.
However, in the UK’s highly unusual current predicament, uncertainty is a far superior situation to the actuality of Brexit, especially given the massive damage that leaving the EU in any scenario will do over coming years and decades.
A no-deal Brexit would obviously do the greatest damage – and people are right to fear such a scenario given the scary brand of populism and patriotism peddled by Mr Johnson – but we must not lose sight of the huge cost of the other exit scenarios.
Mr Johnson is full of big talk, not only banging on about a “can-do” spirit but flagging his belief that Brexit can make the UK “the greatest place on earth” (by 2050).
But we must focus on reality, not fantasy. And we must continue to hope Brexit turns out to be something the UK, for its own good, cannot achieve.
A laughing Mr Johnson appears deadly serious about a no-deal Brexit, which is no surprise given such a scenario would probably be of little, if any, consequence to him.
Thankfully, however, Parliament has shown an astute awareness of what such an outcome would mean for the living standards of millions of people in the UK. In this regard, it is good to see Ms Cameron citing the role to be played by Mr Johnson’s parliamentary colleagues.
However, rather than Mr Johnson “getting a grip” of Brexit, what would be far better for the UK and its citizens would be if the departure from the EU that he wants so desperately slips through his fingers altogether.
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