At last the benefit of Brexit has been spelled out. Unveiling his Budget on Wednesday, Chancellor Jeremy Hunt cheered the nation with his promise that from April, the duty on draught lower products in pubs would be up to 11p lower than in supermarkets. This momentous move, he declared, “was not possible when we were in the EU”.
So the compensation for plunging living standards, hospitality businesses being forced to close because of staff shortages and soaring food prices is cheaper warm beer in pubs.
A positive spin
Hunt tried his best to put a positive spin on the UK’s dire economic situation, extolling the fact that ten year gilt rates had fallen, debt servicing costs were down and mortgage rates were lower. Since his starting point for these achievements was only mid-October, when these had both soared on the back of Liz Truss’s disastrous fiscal event, they didn’t merit a gold star or even a Boy Scout badge for good housekeeping.
The good news, although only relatively speaking, was that the Office for Budget Responsibility (OBR), so irresponsibly by-passed by Truss and Kami Kwasi, detected a slight improvement in the outlook for the UK economy which will mean it just escapes falling into a technical recession. But don’t cheer too loudly: the OBR forecasts that we will limp along with growth of just 0.2% this year.
Migration boosts GDP
Hunt omitted to mention the reason for this better than expected performance: migration. Suella Braverman and her colleagues should take note that the OBR now sees net migration settling at 245,000 a year instead of the 205,000 it was predicting in November. The result of that is a positive boost to GDP, an estimated 0.5% in 2027, not the dreadful drain on the nation’s resources which is how the right like to portray immigration.
The UK needs those migrants. The government is frustrated by the number of its citizens which are not at work and has come up with a battery of measures to persuade them to become economically active, but those who have retired early to enjoy their index-linked pensions are unlikely to be convinced of the attractions of working in care homes or abattoirs. People who are suffering from long-Covid or any number of disabilities are not going to be capable of doing a long day as a waiter or barista.
Long-term, sustainable, healthy
Hunt branded his Budget as one to achieve “long term, sustainable, healthy growth”. Some of the measures might well contribute to that laudable aim but what the UK needs is a more immediate boost to the economy.
There are few levers that a government can pull which will have an almost immediate effect. We have seen that Brexit was one such lever but the effect has been the opposite of beneficial. The OBR puts the cost at a long run hit to productivity of 4 per cent, meaning the country voluntarily opted to lop £100bn a year off its output.
We need that money back!
Realignment to the single market … or readmission
It is now blindingly clear to all but the willfully destructive or economically illiterate that the UK needs to get back into the single market, or the closest alignment to it, as quickly as possible.
Presumably, Prime Minister Rishi Sunak agrees. To hear him lauding the Windsor framework he has negotiated with the EU over Northern Ireland’s future relationship with the bloc, being in the single market is the nirvana of trading arrangements. That remarkable deal, showing a spirit of generosity from the EU that had not been widely expected, could open the door for the UK to admit that the world is not full of opportunities for trade deals which would more than make-up for losing a privileged deal with our largest trading partner.
The realisation that we need to be as closely aligned as possible with our European allies, and preferably in the single market and, eventually, back in the EU, is why it is so vital that the dreadful retained EU law bill should not be allowed to reach the statute book in anything like its current form. As currently drafted, it is difficult to see this atrocious piece of legislation as anything other than a desperate effort to make it incredibly difficult, if not impossible, for the UK to rejoin the EU or the single market.
But the next government, whatever its complexion, is going to need a quick fix for an economy which is impoverishing the people. The single market would provide it.
Freedom of movement is good
A major objection in the past would have been that membership brought with it freedom of movement. But the polls are now showing that a significant majority of people are not opposed to freedom of movement. They know that it works two ways and that UK citizens have enjoyed the benefits of people able to travel, live and work wherever they might choose within the EU. Like the OBR, they also realize that EU immigrants make a positive contribution to the economy.
Let us hope that some politicians are brave enough to acknowledge that the UK made an expensive mistake but is wise enough to cut is losses.
The reason I am standing for election as chair of the European Movement is because I believe the EM could be instrumental in strengthening the calls that could bring about this monumental benefit to the UK.
