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Battered Britain is in no state to withstand a no-deal Brexit | Business

Battered Britain is in no state to withstand a no-deal Brexit | Business


My colleague Andrew Rawnsley and I have both drawn attention to the catastrophe that could have occurred during the pandemic if supply lines had not been preserved through Britain’s membership of the European single market.

True, there was panic buying and there were some shortages; but the worst fears were not realised. This was almost certainly because there were none of the kind of bureaucratic holdups that would have occurred if we had already departed from the customs union and, more importantly, the single market.

There were reports of a U-turn last Friday. Thanks to desperate pressure from the business world, and an injection of common sense into the Cabinet Office, the government is planning to relax border checks temporarily on goods entering the UK from 1 January 2021, whether or not there is a “deal”. Yet although we are enjoying a period of grace, one sentiment still rings out loud and clear: this demented government is determined to leave the single market come what may.

The negotiations are stalled. As the EU’s long-suffering and intrepid negotiator, Michel Barnier, has said: “In all areas, the UK continues to backtrack on commitments undertaken in the political declaration.”

Why? The UK’s chief negotiator, the stolid David Frost, recently made clear that, in insisting on favouring “sovereignty” at the expense of guaranteed economic damage, he is, to coin a phrase, only obeying orders. These orders come from Central Control. As Brendan Donnelly, a veteran observer of the UK-Brussels relationship, says in the Federal Trust thinktank’s June bulletin: “Brexit is the central and only unifying goal of today’s Conservative party.”

A once-great British party is now in the hands of the “European Research Group” – loads of prejudice, but not much research – with one of its leading lights, Jacob Rees-Mogg, appointed leader of the house. Donnelly warns: “It is a fundamental category mistake to think that Johnson could ever be able or even wish to emancipate himself from the ERG … The ERG is now the Conservative party and the Conservative party is the ERG.”

The 20.4% fall in GDP in April confirms that we are already in the worst depression in our history. Yet Johnson, the egregious Dominic Cummings and their cronies take the view that a no-deal Brexit would be lost in the continuing economic horrors of the pandemic.

They laugh at the warnings of the head of the Confederation of British Industry, Carolyn Fairbairn, that business, already battered by a government-imposed clampdown, is woefully unprepared for no-deal. They are impervious to the drastic impact. They do not care. They see sunny uplands ahead for global Britain. Unfortunately, given the US-led rise of protectionism, and the breakdown of the postwar international order, these uplands lie in Aristophanes’s cloud cuckoo land.

Here we are, with the Organisation for Economic Cooperation and Development forecasting something like a 12% drop in GDP this year, and every expert I know predicting carnage this autumn as decent companies crippled by the lockdown fail and unemployment soars.

I have every sympathy with those who argue that this ought to be a 1945 moment: we need vision from our leaders to deal with the modern equivalent of William Beveridge’s goals, as encapsulated by the title of his book Full Employment in a Free Society (1944).

Years of needless austerity, compounded by the social problems highlighted by the epidemic, have brought all manner of issues to the surface. Economists are generally agreed that there is such a thing as “market failure”, so that certain utilities and services are best provided by the public sector. But as the economist Amos Witztum points out in The Betrayal of Liberal Economics: “The problems which societies face are more acute when markets actually work well than they are when there is something which impedes their operation.”

Thus, after the collapse of the Soviet Union, full rein was given to market forces, with the result that the very rich are not only, in F Scott Fitzgerald’s phrase, “different from you and me”, they are obscenely so, while at the other end of the scale there is much work for a modern-day Beveridge still to do.

Johnson is not a modern-day Beveridge. He is obsessed by pursuing a policy of self-harm for the British economy via Brexit. And, to that end, he has packed his cabinet with fellow Brexiters.

As my old friend David Gilmour, historian of Italy and keen student of cabinet history, says: “All previous prime ministers, including Margaret Thatcher, selected talented people even when they disagreed with them. I cannot think of a western European premier since Mussolini who has surrounded himself with so many mediocrities.”


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