Since Brexit, the contribution that external trade makes to Britain’s GDP has “stagnated” because of “persistent underperformance”, according to the World Trade Organisation (WTO) and reported by the FT. The UK’s exports of goods are languishing at 17% below their pre-COVID level, and the WTO identifies Brexit as the main cause. This is what we remainers might see as a statement of the obvious. No doubt Farage and his diminishing band of Brexit supporters will reject the WTO as biased, but when it comes to world trade, it’s difficult to dismiss the findings of the very organisation set up to regulate it. However, it doesn’t mean they won’t try.
In fact, I expect this is precisely what they will do. The denial of reality has become a hallmark of the true believers in Brexit. They KNOW that Brexit has either increased trade or had no effect. The verifiable facts or the opinion of experts are as nothing against the blind ignorance of the true believer. When you’re in a cult, belief is everything; it’s become like a religion.
The FT reveals that our Trade Minister, Sir Chris Bryant, actually went all the way to the WTO’s headquarters in Geneva to receive their report! He was a man I had some respect for until I read that he claimed the British government shared the organisation’s assessment of the UK’s challenges, and was seeking to reduce the impact of Brexit through a “reset” of EU-UK relations. But although they wanted to be “as ambitious as possible” in reducing trade friction with the EU, this would only be “within our red lines”, which include not rejoining the EU single market or a customs union or accepting free movement of people. I'm sure he doesn't think that. Bryant was parroting the party line.
This comes as the OBR, at the government’s prompting, I suspect, has cut its forecast of Britain’s future productivity growth and therefore provided the perfect excuse for Rachel Reeves to implement serious tax increases next month. This will break a key pledge of the 2024 Labour manifesto.
But another pledge, the one not to reverse Brexit, one of the major causes of the reduction in trade and therefore the lack of productivity growth, remains firmly in place. Rachel Reeves is apparently prepared to introduce tax rises rather than solve the fundamental underlying economic problem.
It is mystifying why Starmer has set his face against the logical, obvious and popular-with-the-electorate solution, which is I believe also privately supported by his own party members, his MPs and his ministers. I really can't see what the problem is.
Now, consider this position together with work done by someone at the University of Warwick, which forecasts that net immigration to the UK will fall next year to somewhere between 71,000 and 171,000.
The details are published by the think tank UK in a Changing Europe. It concludes:
“Net migration will fall very sharply in future years as a result of immigration restrictions brought in by both the current and the previous government. Furthermore, emigration will continue to increase, particularly of people with graduate visas. Any political benefit the government may gain from this fall in [net] immigration could be jeopardised by the economic damage that it causes.” (My emphasis)
So, the government has got itself into the crazy position of deliberately throttling the economy’s windpipe by slashing the only real growth mechanism we have, while simultaneously urging it to run faster in pursuit of growth, the lack of which is forcing it to raise taxes. All this is being done to appease Reform UK voters, who are mainly driven by disillusionment with politicians and stagnant living standards.
It does not make any sense to me.
On the topic of the many contradictions in Kier Starmer's Labour government, you might be interested in a series of Substack essays written by Chris Clarke, the son of the former Labour Home Secretary Charles Clarke. He makes many valid points and suggests 30 ways in which Labour could improve communications. It's very perceptive.
Russia and the hybrid war
I wrote on Tuesday that when Russia collapses and Putin falls, most of the West's problems will ease or disappear altogether. The following day, The Irish Times published an article: Do you have any friends in the IRA?’: how Russia’s hybrid war is sowing chaos across Europe.
The piece by Naomi O’Leary catalogues and documents actual events that have taken place across Europe over the past few months. She says:
“…. each incident gathers useful data for Russia. Drone or aircraft incursions test out what European systems can detect, and how quickly a response can be co-ordinated. Hate crimes probe societal sore points. Disinformation is a constant process of trial-and-error to figure out the best topics to foster division.”
Many of these incidents involve low-level, anonymous ‘disposable’ assets paid trivial sums to carry out acts of arson and the like. This is an example of what I was talking about; it is the lowest and cheapest level of Russian-funded hybrid attacks on the West. At the other end of the scale are men and women like Trump, Farage, Le Pen, Orban and Fico, far more expensive assets of one sort or another - and I'm not claiming here that any of them are necessarily paid directly by the Kremlin, but they certainly carry out Kremlin policy and are supported in doing so.
In between is everything else that Putin does to destabilise the West.
At the end of the piece is a reference to The Valdai Discussion Club, a Russian think tank with close ties to the Russian government that hosts a talk by President Vladimir Putin each year. They recently released their annual report, called Dr. Chaos or: How to Stop Worrying and Love the Disorder.
The report seems overly keen to deflect from any criticism of Putin because it says this:
"There is no doubt that today’s shifts are profound and are taking place across virtually all domains. That said, they cannot be viewed as an expression of someone’s deliberate will but should rather be regarded as a series of processes which were quite predictable and natural. We can go as far as argue that no power in today’s world is willing or has the ability to turn everything upside down."
Perhaps not, but Putin,, by his deliberate will is doing everything he can to foster chaos. This is essentially Russian foreign policy in a nutshell..
