The week Brexit Britain showed that it means business
the first opportunity to flee, taking their jobs with them.
As George Osborne (remember him?) put it in May: “A vote to leave would represent an immediate and profound shock… that shock would push our economy into a recession.”
David Cameron said the same thing in June: “You [will] put a bomb under our economy. And the worst thing is we’d have lit the fuse.”
Some bomb. Last week’s figures showed that in the three months to the end of September, the economy grew by 0.5 per cent.
Not that it was just the politicians who got it so totally wrong. Mark Carney, who we are supposedly so lucky to have as Governor of the Bank of England, informed us in March that a Leave vote “would be likely to have a negative impact in the short term. I certainly think that would increase the risk of recession.” Even after the vote, he refused to accept the world might not have ended, saying on June 30 that “Britain is suffering from a form of ‘economic post-traumatic stress disorder’”.
The Treasury and Office for Budget Responsibility both forecast negative growth – contraction, in other words – of between 0.1 per cent and 1 per cent for the third quarter. The Bank of England forecast in August that there would be zero third-quarter growth.
The actual figure, let us remind ourselves, was growth of 0.5 per cent, which equates to a very respectable 2.3 per cent annual growth rate.
As Joe Grice, chief economist at the Office for National Statistics, concluded: “There is little evidence of a pronounced effect in the immediate aftermath of the vote.”
Not that it was just the home-grown Remainers who got it so badly wrong. Christine Lagarde, managing director of the International Monetary Fund, was damning in her assessment of the consequences of a Leave vote: “It’s going to be pretty bad to very, very bad.” The secretary-general of the OECD, Angel Gurría, said in April that “Brexit would be a major negative shock to the UK economy”.
One group, however, predicted last week’s figures with complete accuracy: Economists for Brexit, a group led by Patrick Minford, a professor at Cardiff University – and roundly dismissed by the Remain establishment.
Last week’s good news wasn’t just dry statistics. Nissan’s confirmation that it will stay in Sunderland was a huge boost and would have been a coup even had we voted to Remain.
During the referendum we were – rightly – told that if Nissan decided to leave, it would be a disaster. The UK automotive sector supports 800,000 jobs and Nissan’s Sunderland plant is responsible for nearly a third of the UK’s entire car production. So its presence here is hugely important.
But right as it was to stress the significance of Nissan’s presence, in the referendum the context – the wholly misleading and wrong context, we now know – was of dire warnings that Nissan would up sticks and leave the UK if we voted out.
A round-robin letter, for example, signed by 1,280 business executives and published by the Remain campaign, told us “Britain leaving the EU would mean uncertainty for our firms, less trade with Europe and fewer jobs”.
Try telling that to Nissan’s workforce in Sunderland, where 61 per cent voted to Leave. Post-referendum, Nissan is increasing its investment in Britain. Production will increase to 600,000 cars a year when the plant starts making new SUV models.
On Thursday’s BBC Sir Keir Starmer, Labour’s shadow Brexit secretary, said it was important to welcome Nissan’s decision and not play politics with it – which he then proceeded to do. The insinuation is that Greg Clark, the Business Secretary, must have offered a sweetheart deal to keep Nissan here. Mr Clark could not have been clearer since the announcement that no deal was done and no money offered. It could just be that Nissan has decided Brexit Britain might actually be worth sticking with. But it’s not just Nissan saying that. Last week, Roberto Azevêdo, director-general of the World Trade Organisation, said the Brexit vote was not “anti-trade” and we will not face a Migrants attend a French lesson near a makeshift camp in Paris following the destruction of the Calais ‘Jungle’ on Tuesday. The trade “vacuum or a disruption”, however the EU behaves. “The UK is a member of the WTO today, it will continue to be a member tomorrow. There will be no discontinuity.”
This is the same Roberto Azevêdo who spent the first six months of the year doing his bit for Project Fear, warning about the terrible consequences we would face if we left the EU and questioning our ability to trade, given the many renegotiated trade agreements we would need.
In which vein, Thursday’s news that the on-off EU-Canada trade deal was back on again is an important boost to our own possible deal with the EU. While the deal was off, we were told by the Remoaners it showed how impossible the chances were of a smooth Brexit. They have since gone very quiet on the supposed lessons of the EU-Canada deal.
And last, but very much not least, Tuesday’s announcement that the Cabinet had plumped for a third runway at Heathrow means that, whatever one’s view of the choice, a decision has at last been made.
Yes, there will be more delays for so-called consultation. But the good news is that we might, on some not too far-off day, have sufficient airport capacity to take advantage of the global opportunities presented by Brexit. This week’s succession of good news stories showed that the open, trading, outward-looking model of a 21stcentury economy might be on its way.