Monday 7 November 2022

The boot is on the other foot now

I am not sure that the current governor of the Bank of England, Andrew Bailey, is the most popular man in Downing Street at the moment. His declaration on Friday that we may already be in recession and one that is likely to be the longest in our history if not the deepest, cannot have been welcomed by Sunak. The bank sees the UK economy going into reverse until early 2024, at the end of which will be an election. Not ideal for an incumbent government.  

Late on Friday, The Guardian published an editorial calling for politicians to 'face facts' and stop "denying the cost of leaving the EU keeps Britain locked in a cycle of falling living standards and rising anger." But in writing it, the authors recognised that this is indeed the central problem - Brexit makes facing facts all but impossible.

Sunak they say, "cannot give an honest appraisal of the nation’s economic predicament, since doing so would mean abandoning vacuous rhetoric around Brexit “opportunities”, recognising instead that Britain’s severance from EU markets is a wound that needs healing."

The failure to confront the terrible truth that Brexit has  "caused long-term scarring to the country’s productive capacity and competitiveness" is hard, even for Kier Starmer but quite impossible for Sunak and the Tory party whose members still believe leaving the EU has some measurable benefits.

I said on Saturday that the Brexit Ultras were fighting a desperate rearguard action and one of them is The Guardian's own economics editor Larry Elliot, a long-time supporter of Brexit,  who wrote yesterday that: Brexit isn’t to blame for our current problems; it is still an opportunity.

He writes: 

"There is no dispute that the UK has some serious economic problems – including a chronic trade deficit and a poor record for investment – but they predate the Brexit vote in 2016. Britain has not run a surplus on trade in goods since the early 1980s, and wages adjusted for inflation have barely grown since the global financial crisis of the late 2000s. Had the economy been firing on all cylinders in 2016, it seems unlikely more than 17 million people would have voted to leave the EU."

He defends Brexit by saying "There has been no Armageddon" - a pretty low bar one might think for a project which promised to make us 'prosper like never before.'

He quotes a paper from Briefings for Britain (he mistakenly calls them Briefings for Brexit) - a pro-Brexit group - written by Graham Gudgin, Julian Jessop and Harry Western, reality deniers all. 

The problem for all these people is the same one pro-EU campaigners faced in 2016. Yes, Britain had problems but it was difficult to separate them from EU membership, and the Vote Leave campaign seized on that simple fact to blame them all on the EU.

They were of course helped by the press which had for years carried stupid reports about bent cucumbers and recycling tea bags which were all false, to build a narrative until a huge chunk of the populace believed it.

Now the same thing is happening in reverse. Of course, not all of our economic ills are caused by Brexit. I am the first to admit that. But it doesn't matter as Brexiteers are soon to discover. As long as voters believe they are, that's all that matters.

Whether the recession has been either triggered or deepened by Brexit, in reality, is irrelevant. And plenty of pro-EU groups are quite willing to push the message that it has, as leavers did from the other side in 2016. Proving the counterfactual is always difficult. 

The BfB paper tries to do what The Treasury was doing in 2016, using comparative figures and forecasts to make a point. But as we learned then, anybody bothering to read the details is already convinced and so-called ‘facts’ are only used to reinforce existing opinions.

As Dominic Cummings knew, it’s much easier to reinforce a believer's pre-conceived idea than it is to change minds. His Vote Leave campaign was sowing seeds in already fertile ground.

Now the boot is on the other foot. A majority of people now believe - rightly or wrongly - that some at least of our present problems are Brexit-related and there is plenty of anecdotal evidence as seen in the Yorkshire Bylines Davis Downside Dossier and the Digby Jones Index that Brexit is having a seriously chilling impact and making matters worse than they otherwise would be.

Vote Leave never had that sort of palpable evidence, the sort that voters can relate to in 2016 but now there is undeniable proof aplenty that Brexit has damaged the UK economy.

When respected bodies and individuals produce forecasts pointing to Brexit as either directly or indirectly being to blame, it is now reinforcing a growing emotional feeling that more and more people have.

And what is slowly becoming clear is that EU membership was certainly not responsible for Britain's appalling productivity record.