TEL.  01234 888827     EMAIL. SEAN@SEANRICKARDLTD.CO.UK

TEL...

Sean Rickard - Independent Economic Analysis
e

According to the opinion polls Boris Johnson is heading for a slim majority.   The general view amongst the admittedly small number of people I have spoken to who intend to vote for a Conservative candidate is that compared to Jeremy Corbyn and Jo Swinson, Boris is the best option.   It is beyond dispute that Labour is saddled with its worse leader since Michael Foot.   In addition to crass behaviour such as a willful refusal to apologise for his, at best, tardiness in addressing anti-Semitism or wearing of a style of glasses that do more to suggest senility that dynamism, his lack of leadership is all too apparent in his overseeing of a position on Brexit that is at best difficult to comprehend and a manifesto crammed with expensive promises that he then struggles to say how they will be paid for.   In contrast, Boris Johnson, says very little but in between delivering meals to bemused hospital patients, repeats with ruthless discipline ‘Get Brexit done’.

 

No matter that the phrase is as disingenuous as the Leave campaign’s ‘Take back control.’   Not for the misinformed, ignorant or deceitful Mr Johnson to point out that even if the UK officially leaves the EU at the end of January Brexit will be far from done.   Let us assume – and it’s quite an assumption – that Boris Johnson gets a working majority and that having returned to Parliament on the 13th December things go smoothly i.e. the Queen’s speech and subsequent debate are concluded in time to allow Parliament to pass his withdrawal agreement bill before the 31st January.   True to form, the bill persists in using the profoundly misleading phrase ‘implementation period’ to describe a transitional period during which the UK will in effect be a non-voting member of the EU.

 

With nothing to implement the purpose of the transitional period is for the UK to negotiate its future relationship with the EU.   According to those with relevant experience, these negotiations are likely to take three or four years unless the UK is prepared to accept a very thin, basic free-trade deal heavily weighted in the EU’s favour e.g. the UK in obtaining tariff fee trade with the EU would be subject to severe restrictions relating to rules of origin and standards.   Mr Johnson pretends otherwise, or perhaps he fails to grasp the contradiction in his off-repeated claim that as the UK is starting from a position of alignment with EU rules a complex trade deal can quickly be concluded.   Mr Johnson is seeking de-alignment: the EU will insist on scrutinising the details very carefully so that the negotiations will be painstaking and time consuming.   Further, unlike the Article 50 negotiations, each EU member states will be involved, each will have interests to protect and each will have a veto.  

 

EU negotiators will ensure that whatever deal is finally concluded it will amount to a loss for the UK; access to the single market will be harder for British producers.   The EU’s vastly experienced team will be savvy enough to ensure that there will be no tariff-free access for British producers to the single market if UK standards deviate i.e. are lowered, from their current position.   And access will be further complicated if Mr Johnson attempts to relax current rules regarding state aid for ailing business and workers’ rights.   The EU will not accept being undercut by a UK adopting standards and practices that might typically be found in an emerging nation.   As is always the case with the duplicitous Mr. Johnson, his claim that he will negotiate a ‘best-in-class’ free trade deal is very far from reality.

 

In so far as Mr. Johnson thinks anything out he may have realised that ratification of a complex trade deal would be lengthy and potentially rancorous; he has therefore chosen instead to accept a short, sharp negotiation ending with thin agreement that raises the prospect of years of adjustment as the UK economy adapts to a far looser relationship with its largest and nearest trading partner.   Talk of a Canada ++ deal covering services and internal security matters has been consigned to history.   Access to EU databases, which have proved essential for combatting international crime, appear no longer to be a priority.   It is possible that the unpredictable Mr. Johnson – when faced with the economic and security consequences of a minimalist free trade deal – might change his mind and seek a more substantial and wider-ranging trade deal but this will mean asking for an extension to the withdrawal agreement.   If Mr. Johnson sticks to his current position that he will not ask for an extension the country will be back at the cliff edge of a no-deal Brexit on 1 January 2021.   Not exactly the certainty that business craves and that the cavalier Mr. Johnson has promised.

 

Mr Corbyn, or is it really John McDonnell and his team, is proposing enormous social, environmental and economic change.   Labour has a portmanteau of policies that have been designed to appeal to precisely those voters who are likely to suffer most if Brexit becomes a reality, not least the evidence that NHS drugs and medical devices will be on the table in any post-Brexit trade deal with the US.   But under Jeremy Corbyn’ leadership, Labour is not only failing to get across the opportunities for businesses and living standards inherent in the policy – one that would take government expenditure as a share of GDP to around that of the EU’s most successful economies – it is failing to articulate the reality of a Tory win.   Namely, that Brexit will not be over anytime soon and on the domestic front households face a continuation of current policies or at best ‘Austerity-lite’ polices.   What I wonder will be the reaction of those Labour ‘swing’ voters who, having given Mr. Johnson a majority, come to realise his claim that getting his withdrawal bill through Parliament would herald the end of austerity was a mendacious deception?  

B R E X I T  W I L L  N O T  B E  O V E R  A N Y T I M E  S O O N

28th November 2019

a

Sean Rickard Ltd

< BACK TO BLOGS