The government is keen to play up the supposed benefits of Brexit. We are now getting to the ‘business end’ of the negotiations and as expected all is not as it seems. The government is talking up walking away with no deal instead of an accepting a bad deal (a bad deal would be an admission of its failure to negotiate with the EU) with the Brexit dividend that will be used to provide the NHS with a birthday present. Regarding the dividend, the Institute of Fiscal Studies made it clear that this was twaddle.
Just over a year ago the Office for Budget Responsibility (the governments’ official forecaster) estimated that as a result of lower economic growth because of Brexit tax revenue would fall by 2020/21 by £15 billion. It should also be noted that UK’s growth has gone from the faster-growing economy in G7 to the lowest other than Italy’s. This fall in revenue significantly surpasses our net contribution to the EU. The Institute of Fiscal Studies notes that there will be less rather than more money for the NHS and other services.
If we take our commitment to pay the agreed £45 billion plus a long-term obligation to pay pensions identified (until the need is exhausted), government’s commitment to support agricultural and the scientific research in universities – where then is the dividend for the NHS?
The bank of England has stated that households will be £900 a year worse off; Land Rover and Rolls Royce have already moved some production abroad. EasyJet, BMW, Nissan, Goldman Sachs, Deutsche Bank, Lloyds of London, Barclays to name a few companies that are already planning to expand into Europe. The £900 per household may yet prove to be optimistic.
What of business confidence. The worker from the EU have experienced xenophobia comments especially from some parts of the media, and unsure of their status after Brexit over 100,000 EU workers have left the UK. The government is struggling with Brexit negotiations, a disastrous general election gamble effectively left the government to ransom and as stated above established companies are considering moving part of their operations to Europe. With the state of affairs as they are, why would a foreign company at the moment consider investing in the UK and how do we negotiate trade deals for goods and services with other countries when so many companies are unsure of their future post Brexit and have production outlets in the EU.
With all this and more to come, it’s no wonder with the government’s back against the wall that they are telling tales because at the moment it looks like that is all they have to offer to the British public. What I fear is the blame game, to come, if they don’t succeed with the Brexit negations. This is a hefty price to pay to get our sovereignty back.
* Cllr. Tahir Maher is a member of the LDV editorial team
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17 Comments
The simple fact is there is no Brexit dividend, but and it is a big BUT you won’t get the average brave Brexiteer admitting that. To admit there is no dividend but only a cost (getting higher by the day) would undermine everything they believe they voted for. So for the majority there has to be a dividend because if there isn’t why they made a bad mistake (and that could never happen). So wedded to hubris and stupidity Brexit staggers on, because admitting they where wrong is something they never ever want to do. To be fair there is a subset of Brexiteers who know we will be poorer but accept that because we are getting our sovereignty back, but sovereignty doesn’t pay the rent cooperation does.
The parallel to Brexit and the Lib Dems in coalition is frightening. It could be seen fairly early on that the coalition was poisonous to the Lib Dems but admitting that was too high a price to pay. So rather than facing facts they “true believers” staggered on chanting “it will be alright on the night”, “unicorn will flock to us and vote for us”, “we don’t need our old voters, new ones are so much better”, “our sacrifice will be rewarded” of cause we all know how that ended and now finding a true believer is hard; the facts got them in the end. Brexit is the same the facts keep piling up but the “true believers” stubble on chanting “it will be alright on the night”, “unicorn will flock to us and work for us”, “we don’t need our old customers, new ones are so much better”, “our sacrifice will be rewarded”, “we believe we can fly”, of cause it will end badly and in a few years time finding a “true believer” will be hard. The problem is we don’t like reality so the likelihood that people will flock to the next snake oil salesman with an easy solution is unfortunately high. I fear we are entering the school of experience and a lot of us are unlikely to make it through unscathed.
Experience keeps a dear school, but fools will learn in no other. Benjamin Franklin
Which is why we fight. If you haven’t signed the Peoples Vote petition yet, please do so now. It only takes a few seconds and you can opt out of receiving updates if you want to. Please sign and then circulate as wide as you can.
https://www.peoples-vote.uk/petition
If you haven’t signed the Peoples Vote petition yet, please do so now
I can’t find on that site how the ‘People’s Vote’ proposes the format of the referendum they are asking for?
There are (at least) four options when the deal comes up: accept the deal, leave with no deal, go back and negotiate a different deal (presumably to be put to another referendum), give up and Remain.
Therefore given that it can’t be a simple Option A / Option B choice like the last one, what would the format be?
Would it be a two-stage question, Question A: ‘Leave or Remain’ and then if ‘Leave’ wins that a sub-question, ‘Accept Deal’ and ‘Leave with no deal’?
Or would it be alternative vote between the four options?
Or something else?
y Tahir Maher | Wed 27th June 2018 – 7:38 am……………….. The government is talking up walking away with no deal instead of an accepting a bad deal (a bad deal would be an admission of its failure to negotiate with the EU)…………………………….
Except that is not how it will be portrayed (‘spun’). It will all be down to the intransigence of a hostile EU encouraged, in their refusal to negotiate in good faith, by ‘remoaners’…
“a bad deal would be an admission of its failure to negotiate with the EU “
A bad deal for the UK is also a bad deal for the EU. We are the EU’s prize customer who, unlike the USA, doesn’t threaten to, or actually does it, impose extra tariffs if they buy much less from us than we buy from them. We have a huge trade deficit with the EU, whereas, and hard as it is to believe, we run a trade surplus with the rest of the world.
German exports, alone, to the UK are more than twice the level of their imports from the UK. Who else are they likely to find who’ll put up with this kind of imbalance?
If I’m your best customer, but I don’t want to be part of your gang any longer, then I can’t force you to offer me a good deal. A good deal means I’ll carry on being your best customer. A bad deal means I won’t. It’s really that simple. If the latter, is that a failing on my part or yours?
It does, as they say, take two to tango.
Dav – I think the petition is about the principle of a peoples vote. The wording of the question is important but can be agreed once the principle is agreed.
@ Expats and @Peter M – the point I was trying to make is that if there is no deal and the Tories threaten to walk they will not blame themselves but will look to blame anyone they can. Remember last year they said they would have a deal ready to go to the June EU meeting to be agreed by the British and EU individual countries. That is now not the case
The wording of the question is important but can be agreed once the principle is agreed
But without knowing what the wording is, how can you defend against the accusation that it’s not actually a new referendum, it’s just about giving people another chance to vote and get it right this time, like the re-runs of the EU referendums in Ireland?
To paraphrase Peter “We are special, they need us more than we need them, they will give us cake”. Not seen much in the negotions so far to suggest the EU see it that way, but you never know they might fold at the last minute, you better hope so otherwise you will look a little foolish.
@Frankie,
Look I don’t mind you paraphrasing but please learn to do it properly!
Dav – No, the peoples’ vote campaign is clear that it will be a vote on ‘the deal’. The deal did not exist on 23 June 2016, so therefore the peoples’ vote can’t possibly be a re-run.
@TonyH “No, the peoples’ vote campaign is clear that it will be a vote on ‘the deal’. The deal did not exist on 23 June 2016, so therefore the peoples’ vote can’t possibly be a re-run.”
So it will be a choice of “Deal or No Deal” rather than In or Out? That’s not what I was expecting.
“Just over a year ago the Office for Budget Responsibility (the governments’ official forecaster) estimated that……”
We can all make forecasts. But can we get them right? When the MET office gets theirs wrong it’s very quickly obvious to everyone that something has gone awry. Then, they do make genuine attempts to improve. They are much better now than when Michael Fish famously pooh-poohed the idea of a hurricane being on its way. There was.
Occasionally bodies like the OBR do receive public criticism because they don’t see their hurricane. The Queen famously asked a collection of highly qualified LSE professors why they hadn’t seen the GFC coming. They shrugged their shoulders, looked at each other and muttered something about not being right all the time.
The fact is they aren’t right most of the time. Everyone has forgotten what they’d originally said after a couple of years or so and, usually, no-one bothers to pull them up. They carry on with methods that don’t work and they seem quite happy with that. They are a complete waste of space and taxpayer money! I really don’t know why anyone takes them seriously.
I’m not the first to make this comparison BTW!
http://physicsoffinance.blogspot.com/2013/01/steve-keen-on-bad-weathermen.html
“This fall in revenue significantly surpasses our net contribution to the EU. The Institute of Fiscal Studies notes that there will be less rather than more money for the NHS and other services.”
We can’t always use the argument that an increased GDP will pay for our increased requirements. If that was really the case we wouldn’t have the problems we do!
To some extent we’re victims of our own success. If we’re all better off then we have to pay everyone more to share in all that. So, for example, the members an orchestra are much better paid than they used to be. Running an orchestra is now ultra expensive. Just making more cars etc and selling more of other stuff isn’t going to make orchestras more “affordable”. For musicians – read medical staff generally.
These problems aren’t insoluable. If we think about them the right way. But, as always, we do need to get away from this type of pro-cyclical thinking.
When taxation revenue is high then Government should be cutting back a bit, or taxing a bit more, to prevent inflation. But then everyone thinks “Yippee let’s spend all this lovely money pouring in!”
It’s the other way around. When the economy is a bit sluggish, and tax revenue is low, that is when we do have the spare resources in the economy to spend more without causing high inflation.
Tahir, you quote various expert sources to make the point that everyone will be worse off after Brexit. I agree with those sources directionally but caution that no-one has a clue about how unforeseen ‘contagion’ may lead to unexpected consequences (which will, I think, be massive).
However, I doubt that that it would make a jot of difference even if all the experts in the world sang from the same song sheet. The discrediting of ‘experts’ and their pronouncements was a necessary prequel to the Brexit vote and in any case I doubt that one in a thousand are interested in or listen to economic forecasts.
What is however very obvious is the total incompetence of the Cabinet. During the negotiations they have repeatedly been asked to come back to the next round of meetings with a solution for some particular problem – the obvious example being the Ireland border. Repeatedly, David Davis & Co have gone back with half-baked proposals that show zilch understanding of the issues, aren’t capable of working, depend on fantasy technology, ignores other parties’ red lines or all of the above.
Meanwhile, the promises of ex-EU nirvana are as empty and unsubstantiated as the infamous £350m on the Brexit bus. For example, which UK firms have the size and clout to make huge export gains outside the EU? And why aren’t they doing that already if it’s suddenly so easy? And which of those firms will be unscathed by the likely loss (for most of that very short list) of their biggest export market? It’s likely most will spend the five years after Brexit in the commercial equivalent of A&E.
Peter Watson – I can’t speak to what you were expecting, but LibDem policy for the last 2 years has been very clear: that there should be a referendum on the final deal. And the Peoples Vote campaign is the same.
Now, IF we manage to get that vote, the exact terms of the question will then be up for debate, and personally I think that by then it would be generally agreed that rejection of the deal would mean abandoning Brexit and staying in the EU. Or maybe there will need to be a multi-option referendum, with an option to accept the deal, an option to reject the deal and re-start negotiations, and an option to reject the deal and abandon Brexit. But we need to do this step by step. The important thing now is to win the PRINCIPLE of getting a Peoples vote. (so please sign the petition 🙂 )
IF we manage to get that vote, the exact terms of the question will then be up for debate
I don’t think I could in good conscience sign up for something so vague.
Come back with a concrete proposal for what it is I would be supporting by signing the petition, not a vague ‘principle’, and then I’ll consider signing.