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Brexit - a clear and present danger

Posted by Frank Preiss, on 3 December 2018. Comments: 0

One of the strongest future benefits promised by Brexiteers would be Britain's ability after leaving the EU customs union to make trade deals with the big and growing nations around the world: China, India, Japan, Brazil, Latin America, Australia and, the cherry in the cake, the United States.

Five points for today:

1) We already trade quite successfully with all those countries and regions. If we don't do more it's not because we are constricted by EU rules; Germany, France and even Italy do well under the same rules.

2) One of the poorly thought-through pipe dreams of the Brexiteers is that if Britain ever concludes comprehensive trade agreements with any of these countries we will 'take back control' of our money, our borders (immigration) or our laws. But all such deals involve collaboration and compromise in all three areas. That would be true of any version of Brexit, even trade under WTO rules.

3) The latest government position threatens that our present choice is between its - Mrs May's - deal, or the huge risks of no deal or no Brexit. But by a normal understanding of 'risk' Mrs May's deal and No Deal are huge risks: No Brexit is not. The British people know what it is like to live in the European Union. It's not perfect, though better than Leavers paint it. It's hard to find any risk if we Remain, keep what we have and contribute to the EU's continuing reform and development, as we have always done.

4) The latest economically terrifying 'scenarios' (not forecasts) from the Treasury and the Bank of England are attacked by Brexiteers on the grounds that they are based on the wider economic, financial and global conditions remaining stable. The implication is that these conditions will in fact change in Britain's favour if we are free to take advantage.

Just consider this: the EU is already negotiating its own trade deals with almost all the regions in question. Can anyone reasonably suggest that it will negotiate a more favourable agreement with the UK when we will, by then, be troublesome ex-members who have never believed in the central philosophy of the EU? Can we expect France, Germany, or Ireland to accept any longer than necessary London's dominance over the Euro, that we refused to join?

The truth is that Brexit in any form is based on a Trump-like 'Britain first' vision. Yet even if the British people wanted to live like that we no longer have the global power. There is evidence everywhere, in finance, industry and agriculture, that Brexit can only worsen the UK's position in the wider world.

5) The Brexiteers dismiss the 'expert' economists and authors of those economic scenarios on the grounds their 'forecasts' before the 2016 referendum proved wrong. But far from being wrong, the overall effect of the Referendum was very close to the more pessimistic scenarios at that time. Yes, unemployment did continue to fall, but the Pound also started falling immediately and has stayed down ever since, yet the trade balance has not improved. And from being the top of the EU growth league in 2015/16 while we were still reliable members, the UK is now at the bottom. Ask the British people if they have felt any better off in the past 30 months.

As more 'experts' in more areas of our economy do their sums, it has become obvious that, even under the Brexiteers' most optimistic assumptions, new trade after Brexit is likely to contribute much less than 1% to UK GDP, a fraction of what would be needed to repair the likely damage under the least pessimistic 'scenarios'.

The immense harm that the past two years have already done to the UK's standing in the world means we absolutely cannot afford the clear and present danger of Brexit in any form.

 

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