By Graham Vanbergen: Looking at the Sunday Times this week is a moment in time that says so much about the Britain we live in today. As Sinn Fein wins power in Northern Ireland – The Times’ own poll confirms that 70 per cent of its readers want NI to leave the Union. It also reports that Scotland is to announce an independence vote to break away from the United Kingdom. Then we have the local elections that will, according to its political editor, result in a future hung parliament as the nation becomes ever more divided – because of corruption and sleaze. The paper reports that MPs are labelled as ‘debauched’ – and Brexit is dicing with disaster on every level.
Things are so bad, the paper reports on how wonderful life is for those Brits who have left the country and headed for the sunlit uplands of Europe because without Europe there are none back in ‘Old Blighty.’
It is true that Britain is in big, big trouble. The political fight for power over the next 12 to 24 months, or at least until the next general election will be uglier and more divisive than ever.
Sinn Fien has just become the first-ever Irish nationalist party – standing for a united Ireland and against British rule. As a political party, the idea Sinn Fein would be in a position to nominate an Irish republican as First Minister of Northern Ireland was unthinkable only a few short years ago. And whilst that fight gets going, given that the DUP will not share power with them (which will shake the Good Friday agreement to bits), no trade deal with America can be done. The political bout for Scotland’s independence will be just as bad there as it will be in England.
And if you thought the runup to Brexit and its aftermath were bad – there’s worse coming.
In its latest economic and fiscal outlook report, the Office for Budget Responsibility forecasted that UK international trade will continue to be 15% less than if the country had remained within the EU.
The chairman of the OBR has said that the impact of Brexit on the UK economy will be worse in the long run compared to the coronavirus pandemic. Richard Hughes said leaving the EU would reduce the UK’s potential GDP by about 4% in the long term. “In the long term it is the case that Brexit has a bigger impact than the pandemic“, he told the BBC.
According to economists and the FT, Brexit will bring a recession all on its own, equating to that of the 1973/74 oil crisis stagflation period (about minus 4 per cent to the economy) not for one year but for at least 10 years. Perma-recession will inflict yet more pain to every household in the country, which means more division and more instability, both politically and economically.
Can you imagine if the Labour party had come to power in 2015 and implemented an economic policy that then caused a wave of economic destruction to exports? What would the papers have said about 30-mile queues of lorries backed up waiting to be processed at the Port of Dover that the huge tailbacks could be seen on images taken from space? What if Labour had threatened the Good Friday agreement, threatened our so-called ‘special relationship’ with America or allowed foodstuffs from Fukushima’s nuclear fallout farms to enter our food chain – you can imagine the anger from the political opposition, can’t you. But this is now our new norm.
The Conservative party brought us all this. It gave us Brexit and it has delivered a self-inflicted constitutional nightmare this country has not faced for several hundred years. I have asked Brexit supporters if all this was worth it – and not one has ever hinted that it was not. They refuse to believe what the experts are reporting with analysis and research.
Over the next ten years, it is now a real possibility that the 300-year-old union of the United Kingdom could be lost. As a result, its 242,000 square mile landmass is reduced by nearly 40 per cent, it’s coastline by more than 60 per cent. The 96-mile Anglo-Scottish border could become a hard border as Scotland looks to join the EU.
If that actually happened – GDP would fall by 9 per cent as the population shrinks by 8 million. India and France would romp past us to take 5th and 6th place in global GDP rankings and England/Wales falls to one slot above Canada. Britain’s standing in the world will have been substantially reduced. This, according to Boris Johnson is his vision for ‘global Britain.’
By 2035 Boris Johnson will be long gone, the damage to the union irreparable for at least another generation. Brexit will be as it is becoming today – an unspeakable event, that brought us nothing, that no one wants to take responsibility for. The Labour party has gone silent on it because it is just too toxic to debate – even in today’s corrosive atmosphere of politics.
The world is changing very quickly. We’ve had Brexit, the global pandemic and now war in Europe. Is it possible that Britain comes out of all this turmoil in one piece, unscathed? Whichever way you look at this – it doesn’t look good does it!
The European Financial Review is the leading financial intelligence magazine read widely by financial experts and the wider business community.