The pitiful growth of the UK cannot be attributed to Brexit

A man waves a British flag on Brexit day in London, Britain - Henry Nicholls/REUTERS

A man waves a British flag on Brexit day in London, Britain – Henry Nicholls/REUTERS

Britain’s loud gang of pro-EU obsessives rarely need an excuse to launch yet another attack on Brexit, but their arguments have become more hysterical than ever in recent months. Every bit of bad economic news turns into yet another reason to abandon the UK’s newfound independence and return to the European fold. For people who give any impression of considering themselves intellectually superior to their fellow voters, they show remarkably little curiosity about the real causes of Britain’s economic woes – or indeed the world beyond our borders.

Their latest “evidence” is that the UK is supposedly the only major economy whose GDP is still lower than it was before the pandemic. This, they argue, is solely due to leaving the EU. As economist Julian Jessop has convincingly pointed out, they are dead wrong. For example, the Spanish economy – which, like the UK, has taken a harder hit in 2020 than other European countries – has likewise failed to recover lost ground.

Britain has also been particularly hard hit by the energy crisis because the way energy prices are set makes us particularly vulnerable to rising gas costs. UK data may look worse than other countries because our national statisticians measure the output of utilities more accurately. Public sector productivity, incidentally, has plummeted in recent years, an internal failure that even the most fanatical rejoiner would be hard-pressed to attribute to Brexit.

Not that any of this matters to those who want to bring the UK back into Brussels’ orbit. They have become convinced that the only policy change that will impact the UK’s rate of economic growth is rejoining the single market and customs union. They have no answer when it is pointed out that the UK economy performed appallingly during the period when it was most closely aligned with that of the EU: between the financial crisis and Brexit. Theirs is an ideological belief that Britain is incapable of governing itself.

So they are not interested in promoting policies that can offset any short-term economic costs of leaving the EU, especially the consequences of Brussels’ ultra-protectionist trade restrictions. There was nothing inevitable about the barriers the Eurocrats decided to erect to trade with Britain, their biggest export market, despite all their pious talk about protecting the “integrity” of the single market. They rejected perfectly sensible proposals for mutual recognition of standards and regulations, in part because they were determined to punish the UK for daring to break away.

Knowing that this was always going to be the attitude of Brussels, British governments should have spent the last seven years pursuing massive pro-growth changes in domestic policy – ​​across taxation, regulation, welfare and even monetary policy – ​​in order to radically improve the country’s competitiveness situation. Instead, they’ve gone in the opposite direction, most recently with the ridiculous decision to raise the corporate tax rate, which is extremely unlikely to raise the amounts of money the Treasury believes as it drives business and investment overseas.

Should the Conservative Party lose the next general election, as everyone – including the Government – ​​seem resigned, it will not only be replaced by a party even more inclined to levy harmful new taxes on innovation, labor and business, but whose commitment to outside the EU it is very doubtful. The Brexit dream is squandered and time is running out to save it from extinction forever.

Leave a Reply

Your email address will not be published. Required fields are marked *