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Saturday, October 17, 2020

The inevitable no-deal - a massive web of deceit and broken promises by UK Ministers

I am not sure whether I am more angry or resigned this morning reading on the BBC that Boris Johnson has effectively pulled the plug on trade talks with the EU and told us all to prepare for a no deal exit on 31 December.

One is tempted to think that the lurid tell-all by Jennifer Arcuri in the Brexit-backing, Tory-arse-licking, formerly nazi-sympathising Daily Mail this morning, in which she finally admits to bonking our serial shagger PM, providing far more detail than is decent at any breakfast table, is a deliberate distraction tactic on the part of that rag.

We now have a situation where half of Kent is being converted into a lorry park, drivers may have to show some sort of passport to get into the county, businesses trading in Europe will become swamped in paperwork, tariffs will lead to an increase in the cost of living for all of us, while making UK businesses less competitive with an inevitable knock-on for jobs, and the Good Friday Agreement lies wrecked in a gutter of Johnson's making. 

What is worse is that he has done this in the middle of an economy-wrecking pandemic. This is the No deal’ which no-one voted for and which Johnson himself described as a ‘total failure of statecraft’.

How can we forget the promises and reassurances made to the public when Ministers told us during the referendum that securing trade deals would be easy, that a no deal would not happen and that leaving the EU would make no difference to the way we interact with the trading bloc. Variations on these promises have been repeated constantly since June 2016.

With a no deal looking to be the almost certain outcome of this process, it is worth repeating yet again, warnings by the Institute for Fiscal Studies from October last year. They warned that emergency tax cuts and higher public spending to offset the impact of a no-deal Brexit would send government debt to its highest level in more than half a century.

At that time the IFS said a no-deal Brexit could cause economic growth to flatline in 2020-21, even if the Bank of England cut interest rates and the government stepped in with emergency tax cuts and higher spending.

Describing the scenario emerging from a “relatively benign” no-deal Brexit, the IFS said the budget deficit would rise to almost £100bn or 4% of GDP by 2021-22, reversing the progress over the past decade of producing gradually smaller deficits.

And then there is the Treasury's own analysis from February 2018, which found that a no-deal Brexit will blow an £80bn hole in the public finances, with the leave-voting heartlands of north-east England and West Midlands worst affected.

The report suggests that the north-east would face a 16% hit to regional economic growth, and the West Midlands 13%. And it claims that a hard Brexit would mean an overall 21% rise in retail prices, with a 17% rise in food and drink costs.

The additional borrowing costs would be mitigated by £40bn of gains from leaving the EU, including £11bn in saved payments, leaving £80bn in net costs. Of this, £55bn can be put down to the impact of non-tariff barriers, which could include regulatory divergence or quotas.

The Treausry predicted an additional 21% rise in retail prices, an 18% rise in agricultural costs, a 17% rise in food and drink costs and 14% rise in motor vehicles and parts, over the 15 years post-Brexit. It predicts that if the UK were to trade under WTO terms, tariffs could mean food and drink prices increase by an additional 12.7%.

Boris Johnson and his cohorts are taking this country to the edge of economic and financial ruin in the pursuit of ideological purity and the only people who are set to benefit from it are their friends in the city.

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