Tories Finally Being Forced To Admit The Extent Of Brexit Disaster
It has not been a good few days for the supporters of Brexit as the disaster of the withdrawal from the EU becomes ever more clear. Two events this week highlighted both the economic and foreign policy damage that fateful decision has and will create.
Over at Davos, at the World Economic Forum, French President Emmanuel Macron received the star billing, with the hall already filled to capacity a full hour before he was supposed to speak. Theresa May’s speech, on the other hand, was sparely attended, with seats near the front still available as she began her address. As the NY Times noted, “an uncomfortable reality has been sinking in. Britain’s stature on the world stage has diminished…The former colonial empire has been reduced to a lesser actor.” As one European analyst bluntly put it, “Who sees the U.K. as an important discussion partner?”
It is a pretty sad state of affairs for the former colonial power but it’s descent into irrelevance on the world stage is entirely of its own making. Bizarrely, May’s speech partly focused on Britain’s commitment to free trade and engagement with the world by focusing on the UK’s role in crafting EU trade agreements with Canada and Japan. The irony, of course, is that Britain is voluntarily dropping out of those very trade agreements that May highlighted by exiting the EU.
In addition, with the election of Donald Trump, the US has also been withdrawing from the world and the President’s deserved unpopularity in the UK has actually created strains in the “special relationship”. The two members of perhaps the world’s strongest alliance have seemingly both decided to withdraw from the world stage in many areas, leaving other countries to fill that void they leave behind and both countries weaker than they have been in many, many decades.
Irrelevance in foreign affairs is bad enough but that hardly compares with the economic decline the UK has and will experience under Brexit. Already the drop in the value of the pound has driven prices higher, creating an inflation rate of 3%. As the world’s economies are all finally growing at the same time, the UK is one of the weakest with a growth rate of only 1.7% in 2017 which is expected to drop to 1.5% in 2018.
Remarkably, the government has still not released a detailed study of the potential effects of Brexit. Even as the UK was about to invoke Article 50, Brexit Secretary David Davis admitted that no new economic studies had been done to measure the economic effects of that decision other than the handful of quick analyses done before the vote a full nine months earlier. Last summer, Davis then declared on numerous occasions that studies had been done in “excruciating detail” but was unable to produce anything other than a few sector analyses when forced by Parliament. So, we are a full 19 months after the Brexit vote and the government still has not released a detailed analysis.
The reason that may be so is because the numbers just can not be spun in any way to look good for the UK economy. Details of the government’s internal analysis have been leaked to Buzzfeed and they paint a grim future. According to Buzzfeed, “Under a comprehensive free trade agreement with the EU, UK growth would be 5% lower over the next 15 years compared to current forecasts, according to the analysis. The ‘no deal’ scenario, which would see the UK revert to World Trade Organization (WTO) rules, would reduce growth by 8% over that period. The softest Brexit option of continued single-market access through membership of the European Economic Area would, in the longer term, still lower growth by 2%. These calculations do not take into account any short-term hits to the economy from Brexit, such as the cost of adjusting the economy to new customs arrangements.”
Basically, under every scenario, the UK economy would be worse off than if the country had never decided to leave the EU. Brexit will negatively effect virtually every sector of the economy and even every region of the country. London may lose its pre-eminence as Europe’s financial capital. And the much-touted new trade deals with the US, China, India, and countries of Southeast Asia would together potentially add a rounding error of between 0.1% and 0.6% to the UK’s GDP. Of course, none of these deals have even begun to be negotiated and will likely take years to complete.
Mrs. May’s leadership since the shameful departure of David Cameron has been an unmitigated disaster for the Tories, culminating in the predicted easy consolidation of her majority turning into a coalition government in the last snap election. Of course, the Conservatives themselves have not been able to resolve the stark differences between the pro-Brexit crowd that is still demanding a clean break and those who admit the reality of what Brexit will mean for Britain and are struggling to find a way to keep much of the status quo with the EU in place and still be able to call it “Brexit”.
May’s seeming resilience in the face of these calamities is merely the result of the truth that no one else really wants her thankless job right now. So the country just drifts along, rudderless, with the economy and the country’s services deteriorating, waiting for the Brexit negotiations to come into final form, whereupon another new election, either within the Conservative party or in the country as a whole, will try to determine what exactly the country wants to do next.
