Trillions of reasons why we must never let political populism trump pragmatism

Brexit has proved a disaster for British farmers – particularly the free-trade deal with Australia and New Zealand, which could also affect Irish prices

Nigel Farage campaigning for Leave ahead of the Brexit vote in 2016. Photo: Getty

Angus Woods

November 22 2022 02:30 AM

The Brexit vote of June 2016 sparked a level of upheaval in British politics that has been hard to avoid, even on this side of the Irish Sea.

However, much of what has occurred post-Brexit has been under-reported in the British media.

Irish farmers had serious concerns about the impact that a hard Brexit would have on agricultural commodity prices.

Immediately after the vote, sterling weakened, which affected beef prices. Fortunately, the EU and the UK were able to normalise trade arrangements without the need for WTO tariffs.

There were many reasons put forward during and after the Brexit vote as to why being outside the European common market would be great for the UK, but two of these reasons were shown to be untrue this week.

Trade with the rest of the world, on Britain’s terms, was an ambitious goal, and it is proving hard to achieve.

British farmers recently got confirmation of their worst fears, as former Defra (the UK’s equivalent of the Department of Agriculture) minister George Eustice was highly critical of the free-trade deal with Australia, which he had helped to negotiate.

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He now believes that the UK did not need to give Australia and New Zealand full liberalisation of beef and sheep, and that it was not in Britain’s economic interest to do so.

Any negative impact caused by the UK’s non-EU trade agreements to British beef and lamb prices will have an impact on Irish prices too, and should be a cause for concern for Irish policy-makers and farm leaders.

At the moment Australia and New Zealand are busy in the Chinese and other Asian markets, but having access to the UK gives them the option to change.

There has always been a fear among British farmers that British agriculture would be sold out in favour of the powerful financial City of London in any future trade deals.

Brexiteers believed that London could become an even more powerful financial centre if the UK which was free to trade as they wished with the world. In 2015 London generated 28.6pc of the UK’s national tax intake.

At the time of the Brexit vote, the London Stock Exchange was worth $1.4 trillion more than the Paris Exchange. Last week, for the first time since records began in 2003, Paris overtook London to become Europe’s most valuable market.

The Paris Market is now valued at $2.823tn with London at $2.821tn.

Since Brexit, Paris’s CAC-40 has increased by 47pc, with London’s FTSE 100 up just 16pc.

In London, where 60pc voted to remain in Europe, the loss of the status of being the largest exchange on the continent of Europe will not sit well with investors, who tend to go where the money is.

Conservative politicians have continually refused to acknowledge that their policies have had a negative impact on their citizens’ lives, always blaming the EU, Covid or anything else.

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With UK inflation running at 11.1pc, and interest rates rising, the Bank of England has warned that the UK is facing a downturn which will last until mid-2024 at the earliest.

While the Brexit crash that we feared luckily never happened, there are plenty of signs that the UK economy is slipping below countries that it once towered above.

The relative stability of our political system, along with a balanced Irish budget and economic growth, is not something we should take for granted.

The decline of the London Stock Exchange, with new companies being attracted elsewhere, is a reminder of what can happen when political populism trumps pragmatism.

Angus Woods is a drystock farmer in Co Wicklow