Brexit

No one voted for Rishi Sunak’s austerity

philmullan Brexit, Democracy, Economic policy, Politics

The Brexit vote in 2016 shook up the British political class far beyond its relations with Europe. Before Brexit, before the referendum, successive governments had become detached and distant from those they represented – now they were forced once again to listen to the people. It was quickly recognised that the vote to leave the EU, in going against the government’s own advice, reflected a widespread disenchantment with the consensus of an out-of-touch elite.

Ever since, the governing Conservative Party has faced the difficult task of positioning itself in relation to this populist upsurge. Under Rishi Sunak, however, the latest Conservative government seems to have given up this struggle entirely. Instead, it is returning to type – to a form of managerial governance just as remote and unpopular as anything that went before the Brexit vote.

Read the full article here.

Brexit is not to blame for our economic woes

philmullan Brexit, Economic policy, Inflation, Productivity

There is little doubt that the British economy is in a worse state than most other advanced industrial economies. This calls for a nationwide debate over the causes and potential fixes for this productivity slump. But to say that it’s all Brexit’s fault is a specious thesis that has little to do with economics.

Moreover, the determination to blame Brexit for everything going wrong is letting the Tory government off the hook. Politicians used to blame the EU for their own inaction on economic policy. Now that Brexit gets the blame for Britain’s continuing economic woes, the failure of successive governments to pursue a programme for productivity growth can be downplayed.

Read the full article here.

The tyranny of the EU’s state-aid rules

philmullan Brexit, Economic policy, Politics, State intervention

The esoteric area of European Union state-aid rules has become a focal point in the dragging negotiations between Britain and the EU. Alongside access to British fishing grounds, the question of the UK continuing to adhere to the EU’s rules for state aid is reported to be the big sticking point jeopardising an agreement on future trade terms. On top of this, the same issue of state-aid rules is prominent in the furore over the publication of Britain’s Internal Market Bill. The European Commission’s condemnation of the Conservative government’s proposals to override parts of last year’s Withdrawal Agreement spotlighted the UK’s obligation to notify Brussels of any state-aid decisions that might affect Northern Ireland’s goods market. Why have the state-aid rules attained such importance in the fraught UK-EU relationship? Why are they so crucial for the European Commission (EC)? Read the full article here.

Brexit: it’s time to seize the day

philmullan Brexit, Politics, Trade

There was rather too much ‘shock-and-horror’ reaction to a recent interview with Sajid Javid, the UK chancellor, who merely said that Britain could diverge from European Union rules after Brexit. ‘There will not be alignment, we will not be a rule-taker, we will not be in the Single Market and we will not be in the Customs Union – and we will do this by the end of the year.’ Businesses, he suggested, should get on with adapting to these unfamiliar circumstances.

The ‘surprise’ shown by business organisations seemed a tad overdone. What did they, or anyone else following developments since the 2016 referendum, expect? That Britain would forever remain a rule-taker from the European Commission? The truculent reaction to what Javid said is not credible from those with even a rudimentary grasp of the meaning of sovereignty: a nation deciding its own laws and regulations.

Countries do not often adopt fully aligned, identical rules to others in order to trade with them. For instance, the Chinese and the Americans today export a lot to customers in the EU without aligning to Single Market rules. Indeed, the recognition of regulatory ‘equivalence’ – rather than exact congruence – has become a common practice in postwar economic relations. Countries accept the flow of products and services that accord with regulations established by others as long as regulatory goals are shared. This is what is meant by ‘outcome-based equivalence’.

Why should any future UK-EU deal be different in this respect to the hundreds of other trade agreements between sovereign nations? A reason for doubt could be the European Commission’s desire to ‘have its cake and eat it’. It appears that some EU politicians want to treat Britain as a ‘third country’ but also want to retain control over Britain’s rules and regulations, as if it were still a member state. Javid was simply reminding the world that the General Election mandate prevents the British government from going along with such a half-in, half-out position.

Read the full article here.

This £1 trillion row leaves voters shortchanged

philmullan Brexit, Economic policy, Politics, State intervention

The squabble over the cost of the Labour Party’s policies, started by the Tories at the weekend, tells us next to nothing about the potential impact of either party’s economic programme. But it does reveal the decrepit state of the parties that were once the two big beasts of British politics.

Spending figures – large or small – do not tell us if either party is planning an economic transformation of the country. In themselves, the numbers even say very little about how profligate or prudent either party is being. When it comes to future economic performance, the impact of public spending has much more to do with what the money is being spent on, and the circumstances in which it is being spent, rather than simply how much.

The row over these figures suggests that both the Tories and Labour have yet to appreciate what this General Election is really about. It also alerts us to how little meaningful distance there is between the two parties’ economic proposals. The huffing and puffing about numbers provides camouflage rather than clarity. … Read the article here