Unsettling tick-tock sound as Johnson takes UK down path of Brexit misery
IF you were to choose the most appropriate sound effect for the UK economy going into 2020, it would be a ticking clock.
Not the kind of calming tick-tock of an old-style clock you would imagine you might find in a room somewhere at Eton, Boris Johnson’s alma mater, but rather a more stressful noise of the passage of time. The type of sound that denoted urgency, and time running out. Like in a Hollywood action movie. Except in this case, it seems unlikely there will be a happy ending.
From an economic perspective, it is certainly difficult to look ahead to 2020 with much joy.
The Prime Minister, champing at the bit to “get Brexit done”, is, nevertheless, among those likely to be excited about the start of the year.
After all, he will be full steam ahead in his drive to get his beloved Brexit done by January 31 and he no longer has Parliamentary arithmetic standing in his way.
Given his passion for Brexit and the fact that the previous Conservative government under Theresa May forecast very significant economic damage from every scenario which involved leaving the European single market, the more enthusiastic Mr Johnson is about the new year, the greater the scope for worry.
The UK electorate has apparently ensured that Brexit will be done, putting Mr Johnson back in Downing Street with a thumping majority.
Scotland took a very different view, with the SNP winning the vast majority of the seats and the electorate north of the Border overall clearly retaining the firm anti-brexit stance it took in the June 2016 referendum on European Union membership. These differences of opinion, while it is important to realise that it was mainly the Brexit promoted by Mr Johnson that drove many people who might not normally vote SNP to make this choice, have understandably reignited the debate over Scottish independence.
While Mr Johnson and the Tories pursue their ideological Brexit, sadly backed by members of the electorate likely to be hit hardest by the economic consequences, businesses and households will have to be fleet of foot and remain resilient as they enter the new decade.
So forget the “Get Brexit Done” slogan touted mercilessly by Mr Johnson and his adviser Dominic Cummings in the run-up to the General Election on December 12.
The uncertainty is not over. In many ways, it is only just beginning. The spectre of a no-deal departure seems likely to never be very far away as the first year of the new decade plays out. And then we will have to live with the consequences of Brexit for years and decades.
What sadly does look certain is that Mr Johnson will get his way in taking the UK out of the EU by January 31. And what also appears inevitable, lamentably, is that Mr Johnson will take the UK out of the EU through a hard Brexit, whether in a deal or no-deal scenario.
He and Mrs May before him have made it all too plain that a Tory Brexit is all about coming out of the European single market. For some reason, this is a red line for them: they are determined to end the free movement of people that has been so important to the UK economy and to come out of a free-trade bloc with real power on the international stage.
The “Get Brexit Done” slogan might have hoodwinked many voters. It implied that this move
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was something without consequences, to be achieved quickly.
Rather, January 31 will mark an intensification of the troubles. And the Prime Minister seems keen to put hurdles in the UK’S path as that nerve-jangling clock ticks down to a seemingly now-immovable deadline of the end of 2020 to secure a future trade deal with the EU or not.
Mr Johnson started off his new term as Prime Minister by revealing his big plan for legislation aimed at ruling out an extension to the transition period beyond the end of 2020. This move will increase the chances of a no-deal departure very significantly.
The Prime Minister has made no bones about the Tories’ reasons for wanting to leave the EU. There is, of course, the usual jingoism about how great the UK economy can be. However, when looking for the real substance, it might be worth observing that Mr Johnson went into the final days of the election campaign with a pledge to “bear down on immigration”.
This is a great pity from the perspective of the UK economy as well as society. Given the UK’S need to augment its working-age population to realise its growth potential, a requirement that is particularly acute in Scotland given its specific demographic factors, the last thing we need is a further plunge in net immigration from EU member states.
Net immigration from these countries to the UK has already plunged, in the wake of the summer 2016 vote for Brexit.
And businesses and institutions across a raft of sectors, such as information technology, food manufacturing, agriculture, academia, hospitality and engineering to name just half-a-dozen, are fretful about the future in terms of access to labour and talent.
Many citizens of other EU countries have already moved elsewhere in the bloc, where they can build a more certain future in conditions of stability.
You would imagine that the December election result might exacerbate this trend.
The UK is meanwhile likely to look unattractive to people in other EU countries who might otherwise have thought of moving here.
Likewise, you hear anecdotes that the insular message being sent out by the UK is deterring researchers from the likes of California who might otherwise have been looking to move to Scottish universities. This would indicate that these universities, the most internationally minded of institutions in contrast to the Brexit drive, lose out on talent from further afield as well as the EU because of the picture of the UK painted by the Tories and the Leavers.
The business community has so far appeared at pains to give Mr Johnson the benefit of the doubt, perhaps because it was not keen on the radical policies proposed by Labour under Jeremy Corbyn, in terms of widespread nationalisation, corporation tax rises and free broadband. And it may be cognisant of the fact that it will have to work with Mr Johnson for a long time, given his majority.
However, given how grim the economic backdrop is, it will be interesting to see if patience among the business community wears thin when the inevitable challenges of securing a future trade agreement with the EU in a ridiculously short timescale manifest themselves.