ANALYSIS: Ode to Joy?
Kent Barker looks at the growing evidence of severe economic consequences given a hard or even medium boiled Brexit
Schadenfreude – taking pleasure in another’s misfortune – is not a particularly laudable emotion but, just occasionally, it may be unavoidable.
Take, for instance, the news that leaving the EU without a trade deal in place would cost the UK some £80 billion. Well, no one is going to rejoice in that but when you hear that those who will be hit hardest are from the very same regions that voted most strongly for Brexit almost two years ago, well, it’s hard to resist a little smirk.
According to the government’s own ‘secret’ analysis (published by the Guardian earlier this month), the worst-affected part of Britain would be the North
East which voted Leave by a margin of 58% – 42%. Under a ‘No Deal’ scenario regional economic growth stands to be slashed by 16%. A Free-Trade arrangement – if one could be negotiated – would see an 11% downturn in economic growth, and even remaining in the single market would cut the North East’s economy by 3% because of the damage already done since the referendum and because Britain would be outside the political union and thus have no say in its future operation.
Down here on the South Coast we may not care massively about the plight of Geordies and the Wear or Tees-siders. They’re a long way away and speak with a funny accent. But don’t think just because you’re in Hastings and you voted leave, you’re immune to the consequences.
A ‘No Deal’ exit cuts our region’s economic growth by 7.5%, a ‘Free Trade’ exit by 4.5%, and even staying in the single market will make us all 1.5% worse off. Translated into tangible items, nationally we can expect to see an overall rise in the price of all goods in the shops of around 21%, with food and drink going up 17%. Plus the government would have to borrow £120 billion more over the next 15 years just to cover the hole in public finances – although this might be slightly mitigated by what the government terms ‘potential benefits, of leaving the EU’, ie dismantling a raft of regulations – including those on the environment.
During the referendum debate plenty of figures were bandied around and plenty of experts derided. Academics termed Leave claims a ‘cacophony of misinformation’ while Remainers were accused of ‘scaremongering’. But the difference between then and now is that these current figures have been produced by the impartial civil service at the request of government ministers.
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