MICHAEL Roth, Germany’s Europe minister, was to some degree stating the obvious this week when, highlighting major unresolved impediments to a Brexit deal including the Irish border situation, he declared: “The clock is ticking.”
His warning nevertheless hit the headlines. And for good reason. After all, if we look at the progress, or lack of it, since the June 2016 Brexit vote, and the mind-boggling scale of the issues still to be tackled, warnings from senior figures in the governments of our long-suffering European Union neighbours should be heeded.
The Conservative Government continues to appear to make like as difficult as possible for itself, and unfortunately also for the population at large, by making foolish choices and then digging its heels in. Thankfully, the House of Lords and Scottish Parliament are taking the UK Government to task as best as they can, but neither, sadly, can halt the fiasco.
The UK Government seems to continue to harbour the notion that leaving the European single market and customs union is going to bring untold riches through wonderful new free trade agreements with countries in the Commonwealth and others. The Brexiters’ notion, albeit a truly bizarre one, seems to be that such countries will be positively falling over themselves to put trade with a newly “independent” mighty Blighty top of their “to do” lists.
Of course, as well as being foolish on so many fronts, leaving the single market and customs union also makes it much more difficult to work out a way to avoid a return to a hard border between the Republic of Ireland and Northern Ireland. And goes without saying how crucial it is to avoid such a hard border.
Mr Roth declared: “The clock is ticking. We need now to be making substantial progress, but that is not happening. What is worrying us in particular is the Northern Ireland question where we expect a substantial accommodation from the British side.”
“Substantial progress” has been conspicuously lacking from the UK Government throughout. It is difficult to pick out anything much constructive in its Brexit negotiations, other than perhaps its albeit-delayed realisation that a transition deal was crucial. The transition deal has been welcomed by many businesses and households in terms of putting off the full horror of leaving the EU for a little while longer.
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Meanwhile, the UK Government’s seeming continuing determination to make sure Brexit damages the UK economy significantly remains as baffling as ever.
Confederation of British Industry president Paul Drechsler, addressing CBI Scotland’s annual lunch in Edinburgh last Friday, made the unquestionable case for limiting, as opposed to maximising, the economic damage from the Brexit vote. In this context, he highlighted the fundamental point about the importance of other EU countries to UK trade. And he, quite rightly, hammered home the point that being in the EU did not in any way prevent UK exporters ramping up trade with countries outwith the bloc.
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Mr Drechsler said: “We must prioritise our relationship with the EU – 48 per cent of UK export goods go to the EU and 78% of UK exporters sell into the EU.
“Protecting that trade has to be our number one priority. Even if we signed free trade agreements with the USA, Canada, Australia and New Zealand tomorrow, it would account for less than 3% of our total trade in goods and services. To do the same with Brazil, Russia, India and China would achieve even less - just 2%.”
Brexit fans in the UK Cabinet should be well aware of these numbers. However, given their strategies seem at odds with the actual numbers, they would do well to absorb Mr Drechsler’s numerical points. Or at least reflect on them for a short period, as they flutter around from one big idea to another, without achieving anything of value.
Mr Drechsler is also to some degree stating the obvious when he declares there is nothing to stop the UK from trading with its big EU markets and with other countries. However, the UK Government’s behaviour indicates this simple fact is more obvious to some people than others.
The CBI president told CBI Scotland members: “The evidence says we can do both - trade with the EU and with the rest of the world. Germany already does 4.7 times more trade with China than we do, without a free trade deal and from within a customs union. We don’t need to cast aside established EU partners for potential riches beyond… If we lose access to the single market, it could reduce UK trade by up to 30%.”
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It was also interesting this week to see a survey from the Institute of Chartered Accountants of Scotland showing deepening pessimism among finance chiefs about the ultimate impact of Brexit.
The survey, in association with law firm Brodies, reveals finance chiefs are projecting an even-greater negative impact post-Brexit than they were last spring in terms of both their organisations and the UK economy.
Finance chiefs are also signalling a greater negative impact on their organisations so far from Brexit than they indicated in spring last year.
And businesses have also ramped up contingency planning.
The survey shows about two-fifths of large organisations say they have considered location issues and 51% have reviewed supply-chain factors.
Meanwhile, the latest monthly report from the Bank of England’s agents around the UK, published on Wednesday, shows companies’ investment intentions remain modest, “reflecting continued uncertainty around Brexit”.
Businesses have been understandably wary about big long-term capital investments ever since Brexit – a fact highlighted by a raft of surveys and economists.
And cash-strapped households, weighed down by years of Tory austerity, have been hit hard by above-target inflation caused by sterling’s post-Brexit vote woes and weak nominal wage growth in a struggling economy.
Just about everywhere you look, the evidence of the dampening impact of the Brexit vote on the UK economy is plain to see.
And, as the clock ticks towards the dreaded exit and then towards further economic mayhem with the end of the transition period, there is much worse to come.
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