Saturday, 19 December 2020

Britain edges towards the clifftop - a few things about to happen between now and 1 Jan

And after a very odd, year indeed, it seems that political gravity is finally starting to reassert itself.

The thing with populism, as the US is in the process of finding out, is that at some point the lies unravel and the cognitive dissonance many have been living for the duration is abruptly curtailed, by the intervention of brutal reality. 

The result is usually a shock: not just in the sense of a person or persons receiving unexpected news, but in the sense that the whole of politics - and often, economics - receives a rectifying jolt.

As the Trump era - barring an actual successful coup in the next 31 days, that is - draws to a close across the Atlantic, chickens are finally coming home to roost for the Johnson government over here.

The price that the US is paying, apart from four years of its diminishment on the international stage, is in its terrible figures for Covid-19 deaths.

The price that the UK is paying is also both of those things (granted, the figures on Covid are not quite as bad) but, on top of it all, it is about to receive an unprecedented shock over Brexit. And this one will surely be economic as well as political.

I'll not bore anyone with re-running the arguments from 2016, simply to say that the following is common sense and I think pretty unarguable:

One. We are twelve days away from the deadline and no UK exporter or importer really has any clue about what paperwork they will be filling in and what tariffs they will be paying on 1 Jan. At the very least, they will have a serious disruption to their business, but the likelihood is that many smaller firms, dependent on foreign sales or supplies, will fold as a result.

Two. If you are skeptical that, as a result of this administrative and logistical disaster, Dover will be a train-crash next year, just look at this:

Three. Whatever deal Leave voters signed up for on Thursday, 23 June, 2016, it wasn't this. In fact, there were explicit assurances that a deal would be made. Even if there is a deal at this point, it seems clear that it will be skeletal and have much the same impact on trade as no deal. We are delivering something which was nothing like what was promised to the 52% of the country who voted for it. It is only the shamelessness of the present government which allows it to continue to pretend otherwise.

Four. Neither Johnson nor his negotiators are temperamentally suited to negotiations and deal-making. Worse, he is not seen as a good-faith negotiator. In fact, as his own pal from Wetherspoon's puts it, "I'm not confident that Boris is capable of tying up a 20,000-page agreement and checking the small print". There will also be virtually no scrutiny of the deal, if it comes, either, given the tiny parliamentary time allotted over the Christmas period.

Five. This is all going to happen in the middle of a pandemic, where any potential disruption to vital medical supplies at the border could cost lives.

Six. Not only this, but there is also the double-whammy impact on the economy of Covid and Brexit. The estimated total hit to GDP will be around 6% next year, a large part of this will be Brexit. That is, the economy will contract like never before in living memory, and clearly a lot worse than our neighbours, who will also have an opportunity to take business from British firms struggling to export. 

Seven. Concrete impact of all this? Businesses will go bust. Jobs will be lost. We will have to fight to retain the business of the City and manufacturing here, but some decisions have already been made on this, to invest on the Continent because the UK is too much hassle. Subsidised farmers dropping out of the CAP, mostly Tory voters, will likely be seriously hurt. In short: the "Party of Business" has somehow become the Party of Business Prevention.

I have yet to hear any convincing arguments from the government as to why the above points are incorrect. I also believe the only reason that the country is not yet in a state of blind panic is because the vast majority of citizens do not have any reason - why should they? - to understand international trade, supply chain, financial markets or macro-economics. But those that do - read what the Economist or FT have to say, for starters - are almost unanimous about the chaos which is likely to unfold on 1 Jan. One can only hope that I, and they, are wrong.

Welcome to 2021, folks. You ain't seen nothing yet.

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