Wednesday 26 June 2019

David Chance: 'Brexit: Not yet coming home, but fouling UK'

'Yet another example of the stereotyping of pro-Brexit advocates as xenophobic.' Stock photo: PA Wire/PA Images
'Yet another example of the stereotyping of pro-Brexit advocates as xenophobic.' Stock photo: PA Wire/PA Images

David Chance

"Football's coming home" may have been sung with ironic intent at the World Cup. But as far as the UK economy is concerned, it hasn't been so good since the boost from England's run to the semis.

Now new data shows output expanded just 0.3pc in three months to November from 0.4pc the prior month.

Of course, Scotland, Wales and Northern Ireland haven't sent a team to the World Cup in a long time, but they will share in the economic pain from Brexit despite voting Remain while perhaps Leave-voting Wales will be able to find solace for backing the Brexit's political victory.

The scale of the economic damage playing out is starkly illustrated by the demise of British manufacturing output - down five months in a row and in eight of the past 10 months. According to consultants Capital Economics, that has not happened since the financial crisis.

Put another way, the Conservative Party and DUP coalition partners have arguably inflicted more damage on UK manufacturing than any event other than the worst global recession since the 1930s - and there's more to come.

In the 932 days since the referendum, Britons are no wiser about the terms of leaving the EU, or indeed whether they will, and there are just 76 days remaining to sort it out.

Next Tuesday will see Prime Minister Theresa May try to reconcile parliament to her version of leaving. She will likely fail and prolong the misery of Britain's industries for a project that has only disadvantages in economic terms.

That will bring even more uncertainty, with London having to go back to Brussels and ask for more time to work out just what "taking back control" actually means. Investment bank ING looked at the various options available to rework the agreement - and all would require an extension.

The "Norway Plus" option, which is a soft May variant, would allow access to the European Economic Area alongside a customs union and would require a minimum of several weeks to pass Westminster, which is a big if, given that the backstop remains.

A new referendum could take place in July at the earliest, but would be more likely from September onwards.

The biggest unknown would be if a "no-deal" won a three-way race against Mrs May's deal and remaining whether the EU would let an extended Article 50 "to elapse, or would it try to buy more time to limit the potential chaos".

Although if a Leave victory led to Jeremy Corbyn becoming prime minister, you would likely also have to factor in some more uncertainty.

Irish Independent

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