Analysis

Get off fence, Jezza! These Brexit forecasts are horrible

by Hugo Dixon | 08.02.2018

The government’s study into the impact of Brexit predicts a bloodbath for the public finances, with Labour heartlands in the North and Midlands stuck in slow lane for as far as the eye can see. Jeremy Corbyn has got to stop backing Brexit, and fight for the people to have the final say.

The latest details to leak from this analysis are even more worrying than the headlines Buzzfeed got last week. The Times has most of the nitty-gritty.

Take the public finances first. The study predicts a £120 billion hit every year to public borrowing from 2033-34 if we quit the EU with no deal. Let’s repeat that. This is an annual hit of £120 billion being forecast. Even if we get a free trade agreement (FTA), the knock is an eye-popping £85 billion.

It’s not clear how inflation and other factors have been taken into account in these projections. But to put them in context, the total budget for the NHS this financial year is expected to be £125 billion. Rather than getting an extra £350 million a week, as Boris Johnson dishonestly promised in the referendum, there’s going to be less money for all our public services. That’s austerity as far as the eye can see. That’s not what the people voted for.

What’s more, some of the most pro-Leave regions will be hurt most. In a “no-deal” scenario, the North East would lose 16% growth over 15 years, the West Midlands 13% and the North West 12%. Even if there’s an FTA – probably the best scenario given the government’s policy to yank us out of the EU’s single market – these regions would be knocked 11%, 8% and 8% respectively. Many of these regions are Labour strongholds.

Meanwhile, the two industries that will be hurt worst are chemicals (a 12.5% thwack if there’s an FTA) and the motor industry (an 8% hit). These are unionised industries, close to Labour’s heart.

The government’s line is that the forecasts do not “consider the outcome we are seeking in the negotiations”. But that’s hardly surprising. The government doesn’t have a line. The prime minister can’t even get her government to agree on one, so scared is she of her party splitting. Yesterday’s supposedly crunch meeting of her Brexit cabinet got nowhere, and not much is expected today either.

But Corbyn too is guilty of meaningless waffle. He owes voters a clear policy. Hopefully, the “away-day” he is convening for senior Labour figures to debate Brexit later this month will come up with one. The key plank should be an unambiguous statement that Labour will insist that the Tories’ destructive Brexit is put to the voters to check whether they want it – and to give them the chance of staying in the EU if they don’t.

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Edited by Luke Lythgoe

12 Responses to “Get off fence, Jezza! These Brexit forecasts are horrible”

  • Me too, as a 77 year old, all of whose grandchildren, and all of whose friends at school want to remain. Would other grandparents kindly think of their grand-childnen’s preferences, since we will be leaving for elsewhere anytime now.

  • We need someone to oppose the government. If its not Labour, then who will it be? Someone needs to stand up to their bullying and help us fight for something that is, to use an over-played phrase, a “no brainer”.

    Today WPP is launching a campaign to try to force a second referendum. I signed the petition for one on the day of the results in 2015 and I still hope that we can get the chance to have one.

    Personally, I’m never going to give up the fight, and maybe with the right sort of publicity, the message will get further than what the Mail, Express and Telegraph report and will sink into the pro-leave areas. If not, in the words of one Private, Fraser, “we’re all doomed”……

  • Corbyn has a very deep and firm conviction that the EU is bad. His entourage will need to persuade him that it is better to fight than run away.

  • “The government’s line is that the forecasts do not “consider the outcome we are seeking in the negotiations”.”
    So are there no forecasts that do consider the outcome the government is seeking in the negotiations?
    If not, why not?
    And if there are they need to be published.

    I am and will continue to be an active Remainer until then and, I suspect I would be more convinced in Remain after that.

  • I’m a long term Labour Party member and and each day I hope JC will come out and oppose Brexit. Never thought I would vote for any other party but come May, that’s exactly what I’ll do. I will not give up this fight.

  • If Corbyn isn’t going to capitalise and highlight the damage to the economy set out in these reports, then the rest of the Labour MPs are going to have to do it for him. If that’s embarassing for Corbyn, then tough. No Labour MP can consider themselves to have been elected to assist in damaging the economy and jobs, especially Labour heartlands such as the North East and West Midlands.

    As for the reports, David Davis is being as slippery as ever, claiming they are incomplete. What’s the betting they will be complete just before the final meaningful vote, by which time there wil be scarcely any opportunity to use them in coming to a decision. The Government’s strategy is clearly to ‘bounce’ Tory MPs into voting through a hard Brexit deal, using the threat of a Corbyn government to scare potential rebels.

  • Oh no! Tories in the lead in the polls? Jeremy Corbin should resign now. Pity, I really liked his bold social and economic policies but for me, fighting Brexit is the only game in town. To paraphrase Rutherford, everything else is stamp-collecting.

  • If Cameron is to be blamed for instigating Brexit via a reckless and unnecessary referendum, May is to be blamed for furthering the madness. Corbyn of course will be blamed for not stopping it – or at least doing his level best to.

  • Hello Hugo,

    That was a very informative article! I’m not surprised, and it’s great that certain strong articles are creating so many good responses!

    Theresa May and Co. are following their own agenda and dogma, forgetting that they are servants to the population. The Tories current suicidal course could be legitimised and justified, given the following scenarios:

    (1) That there is an overwhelming majority of people who wish Brexit to happen –
    52% to 48% is not in many peoples view a clear enough margin for the Tories to undertake their wrecking game of the UK economy;

    (2) That this majority includes virtually all the creators of wealth – people who own countless small businesses through the UK (never mind the large ones) who will all be severely affected by a lack of spending power within their local area – I would maintain that many of these people have voted for remain;
    (Does anyone know of any surveys of business in the high street (i.e. hairdressers, car sales showroom, carpenters, heating technicians, etc?)

    (3) That the Tory Party would have a majority in parliament – it does not. It is supported by the DUP, but only under the condition that the Tories spend extraordinary amounts of money on the economy in Northern Ireland.

    I happen to fully believe the Tories fun and games will stop in the Commons in October, when there will be a vote on the EU Withdrawal Bill. There are many reasons, but here are two:

    (a) At this point in time, many prominent companies, such as Honda, Toyota and Nissan, with operations in Labour heartlands, will already have made numerous public statements that they will start to wind down their operations in the UK. There will also be other prominent companies from other sectors who will also have made similar statements. MPs will not vote for the deteriorating economy which will be very evident as a result of this.

    (b) The Irish border question will not have been resolved – it can’t be! MP’s will not vote for this either.

    Any sane mortal must realise that large companies operate in markets where there is a benefit or an operational advantage of being there. I’ve not heard from any one “intelligent” business leader who has argued logically of the benefits from Brexit.

    Jeremy Corbyn really does need medical attention if he cannot possibly understand these rudiments of economics. He doesn’t understand that a custons union (i.e. an agreement for removing tariffs on physical goods) and a single market (i.e. an agreement for services, movement of services [service industries], capital and EU country labour).

    Nick