Sunday 13 December 2020

The cliff edge looms

Well, it looks like I was wrong. I always thought we would get a deal and that no political party or prime minister would wantonly and needlessly hammer our own economy. I thought the political survival instinct would save us from disaster. But here we are just days from exiting the 'transition' period heading for a cliff edge with no sign at all of any breakthrough. Today is decision day but I expect them to announce that talks are to continue and it's not impossible an extension to the transition will be agreed.  Nobody wants to be blamed for walking away.

The Sunday Telegraph has a headline this morning: Billions in no-deal Brexit help for farmers and factories. The paper claims that:

"Two sources involved in drawing up the plans say the package is expected to involve between £8 billion and £10 billion of funding and is inspired by Operation Kingfisher, a support package originally drawn up last year ahead of a breakthrough on the Brexit divorce deal.

"At least four areas of the economy are understood to have been identified by ministers as 'sectors hit hardest'. They are agriculture and food producers, chemical suppliers, the automotive industry and fishing."

The plans are said to cover "resilience deals" for sheep farmers, fishermen, car manufacturers and chemical suppliers who face trade disruption or being hit with "punishing EU tariffs" after Jan 1.  These are the tariffs we have been applying to the rest of the world since 1973 but have now chosen to punish ourselves by exiting the customs union.

You can think of the £8-10 billion as the price we are paying for Johnson refusing a transition period last June - as well as his cake and eat it plan, which we always bound to fail - as the EU27 have been telling him for months even years.

The insanity of Brexit is captured in the deadline.  Was life in Britain so intolerable that we had to escape - no matter what and whatever the cost - on 1 January 2021?   Really?  I am not even considering if it might be worth it in the long run - personally I think not, but even if it was, why the rush?  Why must we leave the transition period in 18 days?  

It is not as if a majority support it. We know from the YouGov polling for WhatUKthinks that support for the belief we were right to leave is (including don't knows) down in the 38-39% level, while those who think it was wrong are up at 50%.

If people think this is some sort of rigged polling, The Sunday Times has an article this morning: Divided we stand: 16 lessons about the new Brexit Britain

The piece is about some focus groups, none of whom have changed their minds, which may not be a surprise. But alongside it there has been some polling done by BritainThinks, a polling company run by Deborah Mattinson, Gordon Brown’s former pollster.  They polled more than 2,000 voters this weekend and found that 9% of people — one in 11 — wish they had voted a different way in 2016. 

They break down the 9% into remainers (5%) and leavers (13%) which is precisely what YouGov find. More leavers are now thinking it was a mistake than remainers now think it was the right decision and the 8 point gap is more than enough to overturn the referendum result. This has been a constant feature of the YouGov polling for at least two years.

There is a massive age-related difference between the optimists and the pessimists as seen in this graphic:


About 49% of the 65+ age group are defined as diehard optimists although I wouldn't mind betting a sizeable amount of money that 99% of them have no idea what Brexit means or what is about to hit us - deal or no deal.

I am convinced Johnson will 'sell' the 'short-term' disruption for as long as he can and keep pumping money into the economy until we have a massive debt mountain being serviced by a tanked economy that we will all regret if and when we get a bout of inflation.

Matthew Parris's piece in The Times yesterday: We’re heading for a true believers’ Brexit,  talked about how a lot of the present cabinet know it will all be a disaster and starts with this:

"They don’t believe in it. The tragedy and the ignominy of this cabinet is they don’t even believe in it themselves. They don’t believe in the painless Brexit or the sunlit future they’ve promised to deliver. You can hear it in their voices as they tour the studios and TV sofas ducking the words “no deal” and babbling about Australia. You can see it in their eyes as they try to reconcile their pledge to strain every sinew to get a deal, with their assurance that it will be fine if they don’t get one. You can sense it in their body language as swagger teeters on the edge of fear. That photograph of Boris Johnson standing beside Ursula von der Leyen said it all"

Parris says, "Tens of millions of people in Britain really believe that we British are much, much better than the rest and that, since the Second World War, history has been selling us short. They have persuaded themselves that it is the European Union that has shackled us and that, unbound, we shall leap."

I am afraid that is all true.  Ben Habib, the former UKIP MEP, financier and property developer was on Newsnight last week and getting quite exercised about Germany using the euro to export artificially cheap goods to Britain and the rest of the world. He has obviously never purchased, sold or competed against a German machines using the deutschmark or the euro.  They are not cheap, in fact they are eye wateringly expensive, but they are invariably the best.

Presumably he doesn't want the euro, he doesn't want the social model Germany has adopted, he doesn't want a proportional representation voting system or the producer society that is the EU or anything at all to do with the EU. He only wants to bellyache about how successful Germany has been inside the EU. Crazy or what?

They are as mad as a box of frogs. 

Putin must be rubbing his hands with delight. What a result he's had and for such a small investment.