Brexit - the damage so far...
Deal or No Deal, Will of the People or People’s Vote? Whichever way we are heading, damage to the UK has already been done. In recent weeks, we have seen mounting evidence of the growing costs of the 2016 Referendum to our economy, our living standards, our public services and our standing in the world. These are irreversible – regardless of what decision is reached before March 29th. Tragically, they are likely to just be a small taster of what lies ahead under an incompetent, uncaring and untrustworthy Tory Government.
Over the last week, official figures showed that the UK economy is growing at its slowest annual rate since 2012. With a faltering economy – 2.3 per cent smaller in September 2018 than it would have been had the UK voted to stay in the EU – the Centre for European Reform reckons that we have lost £17 billion per annum to the public finances.
That’s money that could have been spent on thousands of nurses and doctors, at a time when A&E waits are at their longest since records began in 2004; or on thousands of police, as knife crime rises to its highest level since 2010; or on teachers, libraries, social care, transport …
In addition to money lost to public services by slowing economic growth, we’ve also lost the money spent by the Government on Brexit preparations – at least £4.2bn according to their own figures – preparations that look ever more threadbare by the day.
Closer to home, while news of low inflation may give some small relief, the Resolution Foundation this week estimated that households’ annual real disposable income is lower by around £1,500 compared to pre-referendum expectations.
But most critical of all is the impact on business. Large or small, all firms need political stability and economic certainty to plan for the future. As we write, Flybmi has just collapsed citing Brexit as a major factor. Yet the Government is recklessly prolonging the uncertainty and causing further economic harm. According to Ernst & Young, at least £800 billion worth of assets has already been moved out of the UK by financial services as a result of Brexit. A growing list of companies have announced plans to move all or part of their operations out of the UK, regardless of agreement on a deal: Nissan, Panasonic, Sony, Dyson, JP Morgan. The ones we hear about are the tip of the iceberg. Around 250 British companies are in talks with the Netherlands Foreign Investment Agency about relocation. Whether they all go through with it, “the net result of this displacement activity and uncertainty is slow but very real damage to the UK economy,” says Adam Marshall, the Director-General of the British Chamber of Commerce.
Even if the Government was to slam the brakes on Brexit now, that damage will not be reversed. Nor will the damage to our global reputation. There is nothing more poignant than 40 of our former Ambassadors – who have served the UK’s interests loyally for decades around the world – telling the PM what she must already know: “Our country’s national interest must always be paramount. The Brexit fiasco has already weakened the UK’s standing in the world. We strongly advocate a change of direction before it is too late. It is clear that Brexit has turned into a national crisis”.
The late Paddy Ashdown called Brexit an “act of monumental self-harm”. The pain is already acute.
ONS: GDP Monthly Estimate – December 2018; 11/02/19
Centre for European Reform: The cost of Brexit to September 2018 27/01/19
A&E figures: https://www.independent.co.uk/news/health/nhs-crisis-hospital-waiting-times-winter-patients-england-flu-weather-a8778886.html
Knife crime figures:https://www.theguardian.com/uk-news/2018/dec/13/knife-crime-offences-rise-to-highest-level-since-2010-official-figures
Budget 2018 Speech: https://www.gov.uk/government/speeches/budget-2018-philip-hammonds-speech
The Resolution Foundation: Counting the Cost – UK Living Standards since the 2016 ReferendumFebruary 2019
Ernst & Young Financial Services Brexit Tracker: 07/01/19
Adam Marshall, Director General British Chamber of Commerce 31/01/2019
Brexit is National Crisis Former Diplomats Tell Theresa May - The Guardian