It takes a long time for economies to recover from a financial crisis, as was demonstrated after the Wall Street crash of 1929 and the world recession that followed.
Similarly, it has taken a decade for the British economy to recover from the banking crisis of 2007-09 – and, indeed, it is begging the question to assume that the recovery is complete. Far from it. As is being increasingly recognised, recovery was stifled by an ill-conceived austerity programme whose deleterious effects played no small role in the outcome of the 2016 referendum.
The economic and social damage has been such that what the country requires is a government with the imagination and determination of the post-1945 Attlee government. In which context, the independent National Institute of Economic and Social Research is to be congratulated for its imminent publication of Beyond Brexit: A Programme for UK Reform, a product of the newly formed Policy Reform Group.
Edited by the economists John Llewellyn and Russell Jones (of Llewellyn Consulting) the work draws on contributions from many eminent economists and public figures on the future of economic, industrial and foreign policy, “addressing the challenges facing the country regardless of what particular form of exit from the EU will ultimately be chosen”.
Regular readers will guess where this last sentence leads me. There is now abundant evidence that no form of Brexit would be chosen by any sane administration, and many of us – as is clear from public demonstrations – have not yet given up hope that in the end the best Brexit is indeed no Brexit.
Now, superficially the present government recognises the need for a huge repair job on the British economy, with lots of regional and infrastructure spending. But much of this is pie in the sky and incompatible with the not-so-hidden agenda of the Brexit paymasters, which is for a deregulated, low-tax, “offshore” island – a spectre which has quite rightly been worrying the policymakers whom Boris Johnson describes as “our European friends”.
The fact of the matter is, as recognised by the Office for Budget Responsibility, the Institute for Fiscal Studies, and the authors of Beyond Brexit: a satisfactory programme of UK reform requires an honest recognition that taxes will be required to pay for it. By this I do not mean lower taxes à la Johnson.
Moreover all reputable studies point to a severe knock to the economy’s tax base from any form of Brexit. The dissident former cabinet minister David Gauke, having had access to all internal studies, points out the damage that would result from abandoning more than 70 trade agreements we already have via our membership of the EU. With regard to any new FTA (free trade agreement) we might negotiate with a non-EU third country, “for every pound gained to the UK economy by being able to enter FTAs with third countries we will see a loss of up to £33”.
One of the many farcical, and deeply reprehensible, aspects of this whole business is the way Brexiter ministers have been repeating the blatant lie that a deal such as that Johnson negotiated last week involves “getting Brexit done”.
The aim has been to “deliver” Brexit, rather like my newsagent delivers my newspapers. If the nonsense of leaving the customs union and the single market does actually go ahead, Brexit would be a damaging process that would go on for years – up to 10 years, according to our distinguished former ambassador to the EU, Sir Ivan Rogers, and make our economy a lot poorer.
When I hear ministerial statements such as that Brexit offers the chance “to move on for the good of the country” I think of the losses of 6-9% of gross domestic product that even the government expects.
In his recent BBC interview with James Naughtie about his new novel Agent Running in the Field, my friend John le Carré distinguishes between patriotism and nationalism. Johnson and his ilk are not patriots. Le Carré talks of the theme running through his life’s work – the “conflict between personal obligation and state obligation”.
For the execrable Johnson and his henchman Dominic Cummings it is all about narrow, selfish, personal obligation. My thanks are due to Richard Seaford, emeritus professor of ancient Greek at the University of Exeter, for reminding us of a passage in Thucydides: “The Athenian people, after voting for ferocious action against another city (Mytilene), within days re-debated the issue and voted to reverse their decision.”
In this case it would be a few years, not a few days, but infinitely preferable to the prolonged self-harm with which we are now threatened.
