FLIRTING WITH ARMAGEDDON

That’s what hard Brexiteers and the EU are doing as the clock ticks down to No Deal by default, says our Business Editor... and the economy’s already counting the cost

HARDLINE Brexiteers never tire of reminding us the UK is the world’s fifth-largest economy and, freed of the deadening shackles of Brussels, we will take our rightful place as a powerhouse of growth that puts the EU to shame.

It’s an inspiring vision, indeed. Unfortunately, the blindness to economic reality — wilful or otherwise — currently on display from some Brexiteer politicians who persist in promoting that glorious future, makes it hard to have faith in their claims.

Our latest growth figures are terrible — in fact, ‘growth’ is barely the right word. In December, normally brisk because of Christmas shopping, the economy shrank by 0.4 per cent.

In the final three months of the year, quarter- on- quarter growth slipped to a rate of 0.2 per cent, slightly below the Bank of England’s expectations and down from a rate of 0.6 per cent in the third quarter.

At the same time, the High Street is in a desperate state with retailers big and small going to the wall, and tens of thousands of jobs being lost. But one of the most perturbing aspects of the figures released yesterday by the Office For National Statistics was the slow down in manufacturing.

Take the aerospace industry: British prowess at making wings and aero- engines at companies such as Airbus and Rolls-Royce is the envy of the world, with average growth of just under 5 per cent annually from 2010-2017.

Blame

Yet, despite an increase in demand internationally, UK aircraft manufacture fell by 4.5 per cent last year. Senior industry figures say uncertainty over Brexit is to blame.

They are not alone, as we’ve seen in recent weeks. As hopes of an agreed withdrawal deal have floundered, car company Nissan reneged on a plan to build its new X-Trail SUV at its plant in Brexit-supporting Sunderland.

Meanwhile, the technology company Dyson, whose founder Sir James was a prominent Leave supporter, is already shifting investment and work away from the UK. More manufacturing companies will certainly follow, and this will be particularly damaging to the regions, which will lose high-skilled, high-paid jobs. What price is the Northern Powerhouse in a No Deal Brexit?

We are at a dangerous juncture. The economy is stagnant and the corporate sector is scared.

Out in the real world of business, of balance sheets, profits and jobs, there is despair at the political impasse as the clock counts down to March 29 and the threat of the UK crashing out of the EU looms ever larger.

Some are unconcerned. Jacob Rees-Mogg and his hardcore Brexit cronies in the European Research Group (ERG) relish the prospect of No Deal.

They place their own ideological purity above the economy, or the worries of business. If the economy is trashed in the process, well it’s a price worth paying.

( Incidentally, the fund management firm founded by Rees- Mogg has set up an outpost in Dublin so it can still deal with European investors after Brexit.)

Let’s not forget the role of Boris Johnson in all of this. In recent months, the former Foreign Secretary has undergone a transformation overseen by his new lover, Carrie Symonds. With an eye on a future Tory leadership battle, he’s lost weight, tamed his blond mop and is less the mercurial buffoon, and more of un homme serieux.

In his newspaper column yesterday, Johnson hinted he might just be able to bring himself to vote for Theresa May’s deal if she can obtain a time limit on the Irish backstop.

Later, he burbled fruitily on Radio 4’s Today programme about the Malthouse Compromise (redrafting of the backstop and extension of the transition period) which has the backing of the ERG.

But the mask slipped when he was asked a crunchy question about the 36 per cent tariffs on dairy products under World Trade Organisation rules that could come into play in the event of No Deal.

Beating

Johnson wafted it away with an assertion that the UK and the EU are run by ‘responsible human beings’ who would never let such a thing happen.

The kind of ‘ responsible human beings’ who dismiss the Brexit concerns of employers by muttering ‘f**k business’, as Boris is said to have done last year?

Or ‘responsible human beings’ who, like former Brexit Secretary David Davis, suggest a 20 per cent fall in sterling in the event of No Deal Brexit might not be such a bad thing?

For sheer recklessness, that takes some beating. Yes, our goods would be cheaper abroad, but to suggest a huge devaluation would be an economic boon beggars belief — not least because of the higher prices we’d pay for food and goods from overseas. Both Davis and Johnson have ignored the entirely reasonable fears raised by Environment Secretary Michael Gove that food prices will rise in the event of a No Deal.

Far from being ‘responsible human beings’ who care about the welfare of voters, too many politicians have shown themselves to be charlatans and chancers intent only on their own advancement.

They are prepared to take huge gambles with our national prosperity, while showing themselves to have a precarious intellectual grasp of the economy that would shame a dim A-level student.

Dogma

Naturally, I include in that list Labour leader Jeremy Corbyn. He is a half-baked Marxist who takes economic illiteracy to dangerous new depths.

As for the ‘ responsible’ counterparts in Brussels Boris mentioned, well I don’t have much faith in them either.

Of course, it is absolutely in the interest of Eurocrats to come to a sensible accommodation with Britain. Germany is terrified of the damage thatr No Deal could cause to its ailing car industry, while Italy relies on the City of London to finance its huge debts.

Unfortunately, Brussels dogma has, for the past two years, taken precedence over these valid concerns and the EU has been every bit as intransigent as the Brexiteers over the prospect of a No Deal scenario.

However much Brexiteers gloss over it, there are serious concerns for the economy after a No Deal Brexit. The Bank of England warned last week that growth in 2019 will be as low as 1.2 per cent, and that there is a one in four chance of recession by the summer because of the ‘fog of Brexit’.

And while Rees-Mogg, Johnson & Co talk blithely about ‘WTO rules’ as being the saving grace, they seem completely unaware that the World Trade Organisation has been virtually neutered by a policy of obstruction by President Trump as he fights his own trade wars around the world.

Now with the economic alarm bells ringing, Mrs May is still battling for her deal as the hardliners wave us over the edge.

Business desperately wants MPs to get behind the PM and avoid a No Deal Brexit that could cost tens of thousands of jobs in their constituencies.

Instead of flirting with Armageddon, politicians need to start repairing the damage they’ve done to our image abroad, and make restoring confidence in this country as an attractive place to invest their first priority.