IT has been difficult to escape the growing feeling, since the Brexit vote, of being stuck in one of the more shambolic episodes of Dad’s Army.
The economic damage which a legion of experts told us would occur in the event of a vote to leave the European Union is unfolding, right on cue. The pound has collapsed against the dollar and tumbled versus the euro, simply reflecting the much poorer UK economic outlook in the wake of the June 23 Brexit vote.
Yet we have this absolutely farcical situation where political leaders are giving the impression that a stiff upper lip, and a good dollop of Britishness, will help us see off the threat of recession. Warnings about the obvious and myriad detrimental impacts of Brexit are met with bluff and bluster.
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We have seen more Union Flag bunting than in the Great British Bake Off from the victorious Leave supporters, as if it is some sort of talisman that will restore the UK economy to some kind of perceived grandeur of decades long past.
There also seems to be a view that, if we do not talk about the huge economic problems created by the result of a referendum that never needed to be called, they will not materialise.
We have seen the Brexit camp warn Bank of England Governor Mark Carney not to talk the Great British economy down. But he is only stating the obvious – the UK economic outlook has deteriorated with the Brexit vote.
Whether we talk about it or not, the reality of the situation will be much the same. The Bank signalled yesterday that its Monetary Policy Committee may be inclined to cut UK base rates from their record low of 0.5 per cent next month.
It is not for nothing that policy-makers are having to mull the best way to shore up the UK economy. You would imagine that Lance Corporal Jack Jones of Dad’s Army would by now be seeking permission to panic.
The Brexit omnishambles is even being portrayed in some quarters as an opportunity. An opportunity for what? For trying to limit the damage from a self-inflicted fiasco? While it is important for individuals and businesses to do what they can to minimise the cost of Brexit to them, that is really no kind of opportunity at all.
Opportunity usually implies upside. Some supporters of a Mighty Blighty outwith the EU seem to hanker back to bygone days of Empire, and see some huge potential for replacing lost trade with key European markets through a major push into Commonwealth countries. A brief glance at the relative importance of the UK’s export markets, in value terms, should be enough for most people to dismiss the notion that a focus on Commonwealth countries will produce a net gain as mere fantasy.
Scottish businesses certainly see more threat than opportunity from leaving the EU, with a survey from Strathclyde University’s Fraser of Allander Institute today revealing more than 60 per cent think the Brexit vote will be bad for their businesses. Only 19 per cent view the impact as positive.
Somewhat alarmingly, around 40 per cent of Scottish businesses believe Brexit could lead to a reduction in their investment and expansion plans. And 34 per cent say it is likely they could cut back on recruitment plans.
Already, we have seen the post-Brexit vote shudders shake the commercial property market, and there are signs that private equity investment in the UK is being hit.
Before long, we are likely to see inward investment in the UK tumble. And it will surely not be long before the UK is hit by the departure of companies from outside the EU that already have operations here. After all, many of these companies set up operations in the UK mainly to gain unencumbered access to the huge EU free trade bloc.
Fund management giant BlackRock has warned investment in the UK will likely be hit by the decision to leave the EU. It now forecasts the UK will fall into recession in the coming year.
Scottish Chambers of Commerce has, based on recent weak performance and the Brexit vote, voiced “very acute fears” of recession north of the Border.
There has been talk that the pound’s collapse might produce a short-term boost to exports. It remains to be seen whether or not this will materialise. If it does, it will surely be short-lived.
And corporate headquarters will also likely be lost from the UK.
All of this UK economic damage looks inevitable, with new Prime Minister Theresa May emphasising “Brexit means Brexit”.
In Scotland, First Minister Nicola Sturgeon, citing the large majority vote north of the Border for staying, understandably says “remain means remain”, flagging a determination to find a way to keep Scotland in the EU.
Meanwhile, the team Mrs May has put in place ahead of the major Brexit negotiations with the UK’s partners in the EU signals great potential for this most Great British of farces to continue.
We have seen prominent Leave supporter David Davis appointed as Secretary of State to lead the negotiations on leaving the EU – the so-called “Brexit minister”. And high-profile Brexit campaigner Boris Johnson has been appointed Foreign Secretary. This pair’s views hardly give you confidence there will be much harmony in the Brexit negotiations.
And this is a real problem for the UK. The EU is in a much stronger position in the negotiations given its scale and clout on the world stage. The UK, in contrast, risks becoming a global backwater.
The UK’s best hope of trying to mitigate the huge economic damage arising from its decision to leave the EU seems likely to hinge on its negotiators conducting themselves in a friendly, constructive, and charming manner. They must appeal to the better nature of our current European partners, which could after all just shut the UK out of the huge single market.
Sadly, unlike Dad’s Army, this sorry shambles is no laughing matter.