The United Kingdom is in turmoil over Brexit. The government hasn’t got a clue; Parliament itself is divided and we are the world’s laughing-stock.
And it is going to get much worse – because all the trouble so far has been about the withdrawal agreement, which is only a part of the matter.
Years of trade negotiations are to follow – and it seems likely they will be acrimonious.
The bottleneck in Parliament at the moment is happening because backbench MPs don’t expect to have any influence on those long trade talks; if they want to have any control at all over Theresa May’s lunacy, they must make it a condition of accepting the withdrawal agreement.
Oxford University’s Simon Wren-Lewis has written informatively about this in his blog, Mainly Macro, where he states: “If May’s deal is approved we can look forward to a politics dominated by internal squabbles within the Conservative Party, and the absence of constructive negotiations with Brussels, for perhaps the next four or more years.”
This is because the withdrawal agreement does nothing to resolve internal conflicts within the Conservative Party, or conflicts within Brexit itself.
This is what the conflict over the Northern Ireland ‘backstop’ is all about, according to Professor Wren-Lewis. Its existence means part – or all – of the UK must stay inside the Customs Union, but Brextremists in the Tory Party won’t accept this because they don’t like it.
The reason they don’t like it is that it ties the UK to Europe when they want to do a trade deal with the United States at the earliest opportunity.
Prof Wren-Lewis states: “In an age where the regulations governing trade in goods and services are increasingly decided by large regional blocks, the only rationalisation of Brexit that makes any kind of sense is that we move from the EU block to the US block.”
He makes the consequences clear:
- Weakened regulations on workers’ rights
- Weakened regulations on the environment
- Weakened food standards (meaning we accept chlorine-washed chicken)
- Metamorphosis of the NHS into a US-style model of healthcare
- And while the UK was able to influence EU decisions, it will have no say in what the US does.
I fear that people will be lulled into false security about such matters by the fact that nothing is likely to change immediately after a withdrawal agreement is approved – whenever that may be.
The UK would enter a transitional period in which we remain in the Customs Union and Single Market but have no say in either.
But the long-term consequences are devastating: A study by the Centre of Economic Performance and The UK in a Changing Europe suggests that from 2030 onwards UK GDP per capita will be lower by between 1.9 per cent and 5.5 per cent as a consequence of leaving the Single Market.
The midpoint of that range puts household losses at £3,000 every year.
In practise, the effect is likely to be worse, because of other effects not included in the model like lower foreign investment and reduced competition.
And that’s before you add in the impact of changing to a US-style economy and health service, in which household expenses are certain to increase.
There will – of course – be a large hit to the public finances, implying higher taxes or less public spending, even after allowing for an end to contributions to the EU, according to Prof Wren-Lewis.
Conservative Brextremists will benefit from all this – but I doubt that will be any consolation to you as you are plunged deeper into poverty and debt by a decision most of us didn’t want to take.
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