Thursday, November 17, 2022
Heseltine trashes Brexit
It is no surprise that Michael Heselton is not a fan of Brexit, but his analysis of the damage done by this policy in a speech on Tuesday is damning and stands out as an exceptionally honest and perceptive position for a Conservative politician. His criticism is worth quoting in full:
A short time ago I argued that: ‘If Boris goes Brexit goes’. Johnson was not alone in souring our relationship with Europe. The Atlanticist prejudices of Rupert Murdoch and Conrad Black using a power over our media that would never be granted to foreigners in other countries, the populism of Nigel Farage and Paul Dacre’s nationalistic editorship of the Daily Mail all contributed to the propagandist exploitation of the consequences that followed from the implementation of the EU single market.
The harmonisation of the rules and regulations that governed the European economies was one of Margaret Thatcher’s greatest achievements. To introduce one European regulation in place of 28 involved a constant flow of forms. The blame game began. Boris Johnson led the charge to Get Brexit Done.
Well, not quite. Brexit was never going to get done. Brexit was based on an undeliverable set of promises:
Get our country back
New trade deals
Bonfire of controls
End of wealth destroying regulations
Immigration controls
No border in Ireland
That was 2016.
Four Prime Ministers, four Trade Secretaries, five Foreign Secretaries, six Chancellors, six Chief Brexit negotiators and an oven-ready Brexit later, we can see the worthlessness of those promises. I must be fair. The impact of Covid and Ukraine has seriously prejudiced our living standards and those of the Western World. We hope that the worst of Covid is behind us.
The vaccine developed under the regulatory discipline of the European Medicines Agency was the first to achieve clinical approval. The agency which provided hundreds of jobs in London has now been transferred to Amsterdam because of Brexit Ukraine enjoys the support of the Western World, and to its credit we all appear ready to pay a high price for it.
However damaging to us now, the effect of covid and the Russian invasion of Ukraine may be relatively short term. Brexit is not. It represents a permanent fracture of our relationship with our closest neighbours and our largest market.
It has led to queues in the hospitals and G.P.s waiting rooms, disruption to supply lines, increased prices and interest rates. It reduces our attraction as a gateway to one of the world’s largest markets and diminishes our ability to influence European decisions over great global challenges.
I followed every Conservative Prime Minister from Winston Churchill up to and including Theresa May in their support for our membership of Europe. You would expect me to be critical of Brexit but I am not alone. Recently the Daily Telegraph put the past six years into context. Under the headline “After six wasted years”.
Alistair Heath summarised the situation as follows:-
“It has been clear for years that our putrefying economy is in desperate need of shock therapy. Yet instead of addressing its many horrific pathologies, our ruling class, well served by the status quo, has stubbornly blocked radical surgery. The result has been catastrophic: Poland and Slovenia are catching up with us in terms of middle-class lifestyles, and our desperate young can’t afford to buy a home.
I quoted the first four words of the headline. Let me quote the whole headline. After six wasted years Truss is about to deliver a Brexit that actually works. The consequence of Liz Truss' seven weeks in office has an eloquence beyond the finest oratory. Let me set out the reality of Brexit.
One pound sterling was worth 1.48 US dollars on 23 June 2016, the day of the referendum. The following day that value plummeted to 1.36 dollars. Yesterday a pound was buying 1.18 dollars. That amounts to a loss of over 20% of the pound’s value against the dollar since 2016. The pound has also lost over 12% of its value against the euro, falling from an exchange rate of over 1.30 before the referendum to 1.14 yesterday.
The London School of Economics has estimated that Brexit alone – before the effects of the pandemic and the war in Ukraine are accounted for - is responsible for a 6% rise in food prices. Put starkly, Brexit means that more people are unable to pay their mortgage or rent, are having to turn to food banks, or are unable to heat their homes.
The Resolution Foundation estimates that average real pay per UK worker will, by the end of the decade, be £470 lower each year - that’s a thousand pounds for an average couple. Normally, lower exchange rates have an important silver lining in that they make UK exports more affordable and increase their volume. But the signs are that – due to Brexit-induced trade barriers and red tape - this did not happen. Post-Brexit.
UK exports to the EU fell by 14% in 2021. The Centre for European Reform, has estimated that Brexit had, by the end of 2021, reduced trade in goods between the UK and the EU by 13.6% and left UK GDP 5.2% lower than it would have been had the UK stayed in the EU single market. The CER puts the Brexit hit to overall investment in the UK economy at 13.6%.
The Office for Budget Responsibility concluded that consequent upon the new trading relationship as set out in the Trade and Cooperation Agreement that came into effect on January 1 2021 British imports and exports would eventually be reduced by 15%. They further concluded that new trade deals with non-EU countries will not have a material impact on GDP. Little surprise that the Truss government did not consult them about the consequences of their budget.
I doubt if the government were consulted about the decision to build a new model of the Land Rover Defender in Slovakia. The queues in the Health service are of alarming proportions. The European doctors and nurses have gone home. The government is left trawling developing countries to replace them.
No one explained that a consequence of Brexit would be that our country - one of the world’s richest - would have to attract specialists trained by some of the world’s poorest.
The OECD in June of this year predicted that in 2023 the UK economic growth at nil would be the slowest in the G20 above only Russia. Three months later the dire energy crisis in Germany had a similar effect there. The three major credit rating agencies . crucial to UK’s borrowing costs - Moody’s, Fitch and S&P have this year all downgraded the outlook for the UK from stable to negative.
These are the judgements of independent organisations and markets and stand in stark contrast to the propaganda of Brexiteers. It was all too easy to promise a bonfire of red tape and demonise Brussels bureaucrats in a cynical exploitation of people’s anxieties and frustrations.
Only yesterday in the Times, Mark Littlewood, Director General of the Institute of Economic Affairs, a pro Brexit think tank, wrote ‘Nowhere has the failure been so stark as in the strange story of the almost complete absence of a so-called Brexit dividend.’
The simple truth is that six years on, the only significant example of that bonfire has been to allow unlimited bankers’ bonuses. Regulation is the difference between civilisation and the jungle. We can all enthuse at David Attenborough’s brilliant depiction of life red in tooth and claw where the only law is survival of the fittest.
Regulations are the codes and standards that hold modern societies together. That is why whenever the government has sought to dilute or lower the standards they uphold, civilised bodies like The National Trust, The Wildlife Trust and the Royal Society for the Protection of Birds protest at the legislative processes involved.
The Brexiteers told us new deals with faster growing markets would more than compensate for lost European trade. Six years’ later all but three of those new deals merely replicate those already negotiated by the EU. A deal with the United States has been scuppered by the government’s attempt to unilaterally override the Northern Ireland protocol.
India wants us to reverse our immigration controls as the price of a deal. There are new deals with Australia and New Zealand. The consequences for our farmers are so adverse that even a minister who helped negotiate it says the Australian deal is not good for the UK.
No wonder full implementation is delayed until the late 2030s! I am helped once again by the Sunday Telegraph - Jeremy Warner on October 30th. wrote “Brexit is irreversible, but we must strengthen economic ties with the EU”. I disagree with his irreversible gambit. Public opinion has already moved.
In October an IPSOS MORI Poll reported that 51% of the people thought that Brexit had damaged the economy whilst only 22% thought the opposite. Listen, however, to what Warner says about Brexit. He refers to Rishi Sunak’s commitment to building an economy that embraces the opportunities of Brexit.
He needs to get a move on and indeed articulate precisely what those opportunities are - for six years after Britain voted to leave the European Union all we’ve got to show for it so far is political, economic and financial chaos. From an economic perspective there has been zero payback and particularly in the area of international trade and reputation, considerable harm.
Let's hope his party colleagues are paying attention.
A short time ago I argued that: ‘If Boris goes Brexit goes’. Johnson was not alone in souring our relationship with Europe. The Atlanticist prejudices of Rupert Murdoch and Conrad Black using a power over our media that would never be granted to foreigners in other countries, the populism of Nigel Farage and Paul Dacre’s nationalistic editorship of the Daily Mail all contributed to the propagandist exploitation of the consequences that followed from the implementation of the EU single market.
The harmonisation of the rules and regulations that governed the European economies was one of Margaret Thatcher’s greatest achievements. To introduce one European regulation in place of 28 involved a constant flow of forms. The blame game began. Boris Johnson led the charge to Get Brexit Done.
Well, not quite. Brexit was never going to get done. Brexit was based on an undeliverable set of promises:
Get our country back
New trade deals
Bonfire of controls
End of wealth destroying regulations
Immigration controls
No border in Ireland
That was 2016.
Four Prime Ministers, four Trade Secretaries, five Foreign Secretaries, six Chancellors, six Chief Brexit negotiators and an oven-ready Brexit later, we can see the worthlessness of those promises. I must be fair. The impact of Covid and Ukraine has seriously prejudiced our living standards and those of the Western World. We hope that the worst of Covid is behind us.
The vaccine developed under the regulatory discipline of the European Medicines Agency was the first to achieve clinical approval. The agency which provided hundreds of jobs in London has now been transferred to Amsterdam because of Brexit Ukraine enjoys the support of the Western World, and to its credit we all appear ready to pay a high price for it.
However damaging to us now, the effect of covid and the Russian invasion of Ukraine may be relatively short term. Brexit is not. It represents a permanent fracture of our relationship with our closest neighbours and our largest market.
It has led to queues in the hospitals and G.P.s waiting rooms, disruption to supply lines, increased prices and interest rates. It reduces our attraction as a gateway to one of the world’s largest markets and diminishes our ability to influence European decisions over great global challenges.
I followed every Conservative Prime Minister from Winston Churchill up to and including Theresa May in their support for our membership of Europe. You would expect me to be critical of Brexit but I am not alone. Recently the Daily Telegraph put the past six years into context. Under the headline “After six wasted years”.
Alistair Heath summarised the situation as follows:-
“It has been clear for years that our putrefying economy is in desperate need of shock therapy. Yet instead of addressing its many horrific pathologies, our ruling class, well served by the status quo, has stubbornly blocked radical surgery. The result has been catastrophic: Poland and Slovenia are catching up with us in terms of middle-class lifestyles, and our desperate young can’t afford to buy a home.
I quoted the first four words of the headline. Let me quote the whole headline. After six wasted years Truss is about to deliver a Brexit that actually works. The consequence of Liz Truss' seven weeks in office has an eloquence beyond the finest oratory. Let me set out the reality of Brexit.
One pound sterling was worth 1.48 US dollars on 23 June 2016, the day of the referendum. The following day that value plummeted to 1.36 dollars. Yesterday a pound was buying 1.18 dollars. That amounts to a loss of over 20% of the pound’s value against the dollar since 2016. The pound has also lost over 12% of its value against the euro, falling from an exchange rate of over 1.30 before the referendum to 1.14 yesterday.
The London School of Economics has estimated that Brexit alone – before the effects of the pandemic and the war in Ukraine are accounted for - is responsible for a 6% rise in food prices. Put starkly, Brexit means that more people are unable to pay their mortgage or rent, are having to turn to food banks, or are unable to heat their homes.
The Resolution Foundation estimates that average real pay per UK worker will, by the end of the decade, be £470 lower each year - that’s a thousand pounds for an average couple. Normally, lower exchange rates have an important silver lining in that they make UK exports more affordable and increase their volume. But the signs are that – due to Brexit-induced trade barriers and red tape - this did not happen. Post-Brexit.
UK exports to the EU fell by 14% in 2021. The Centre for European Reform, has estimated that Brexit had, by the end of 2021, reduced trade in goods between the UK and the EU by 13.6% and left UK GDP 5.2% lower than it would have been had the UK stayed in the EU single market. The CER puts the Brexit hit to overall investment in the UK economy at 13.6%.
The Office for Budget Responsibility concluded that consequent upon the new trading relationship as set out in the Trade and Cooperation Agreement that came into effect on January 1 2021 British imports and exports would eventually be reduced by 15%. They further concluded that new trade deals with non-EU countries will not have a material impact on GDP. Little surprise that the Truss government did not consult them about the consequences of their budget.
I doubt if the government were consulted about the decision to build a new model of the Land Rover Defender in Slovakia. The queues in the Health service are of alarming proportions. The European doctors and nurses have gone home. The government is left trawling developing countries to replace them.
No one explained that a consequence of Brexit would be that our country - one of the world’s richest - would have to attract specialists trained by some of the world’s poorest.
The OECD in June of this year predicted that in 2023 the UK economic growth at nil would be the slowest in the G20 above only Russia. Three months later the dire energy crisis in Germany had a similar effect there. The three major credit rating agencies . crucial to UK’s borrowing costs - Moody’s, Fitch and S&P have this year all downgraded the outlook for the UK from stable to negative.
These are the judgements of independent organisations and markets and stand in stark contrast to the propaganda of Brexiteers. It was all too easy to promise a bonfire of red tape and demonise Brussels bureaucrats in a cynical exploitation of people’s anxieties and frustrations.
Only yesterday in the Times, Mark Littlewood, Director General of the Institute of Economic Affairs, a pro Brexit think tank, wrote ‘Nowhere has the failure been so stark as in the strange story of the almost complete absence of a so-called Brexit dividend.’
The simple truth is that six years on, the only significant example of that bonfire has been to allow unlimited bankers’ bonuses. Regulation is the difference between civilisation and the jungle. We can all enthuse at David Attenborough’s brilliant depiction of life red in tooth and claw where the only law is survival of the fittest.
Regulations are the codes and standards that hold modern societies together. That is why whenever the government has sought to dilute or lower the standards they uphold, civilised bodies like The National Trust, The Wildlife Trust and the Royal Society for the Protection of Birds protest at the legislative processes involved.
The Brexiteers told us new deals with faster growing markets would more than compensate for lost European trade. Six years’ later all but three of those new deals merely replicate those already negotiated by the EU. A deal with the United States has been scuppered by the government’s attempt to unilaterally override the Northern Ireland protocol.
India wants us to reverse our immigration controls as the price of a deal. There are new deals with Australia and New Zealand. The consequences for our farmers are so adverse that even a minister who helped negotiate it says the Australian deal is not good for the UK.
No wonder full implementation is delayed until the late 2030s! I am helped once again by the Sunday Telegraph - Jeremy Warner on October 30th. wrote “Brexit is irreversible, but we must strengthen economic ties with the EU”. I disagree with his irreversible gambit. Public opinion has already moved.
In October an IPSOS MORI Poll reported that 51% of the people thought that Brexit had damaged the economy whilst only 22% thought the opposite. Listen, however, to what Warner says about Brexit. He refers to Rishi Sunak’s commitment to building an economy that embraces the opportunities of Brexit.
He needs to get a move on and indeed articulate precisely what those opportunities are - for six years after Britain voted to leave the European Union all we’ve got to show for it so far is political, economic and financial chaos. From an economic perspective there has been zero payback and particularly in the area of international trade and reputation, considerable harm.
Let's hope his party colleagues are paying attention.
