JAMES BALL says many global companies will cut UK operations and implement mass layoffs if Brexit is forced through at an idiotic pace.
Remember Brexit? It happened roughly a century and a half ago, on January 31 of this year. The UK left the EU and is no longer a member state. A bitterly divisive referendum campaign, several years of fractious argument, two elections, and an eventual thumping Conservative majority all eventually worked to one end: Brexit got done.
There are plenty of reasons that we might not immediately have felt either the best promised effects of Brexit, or the worst consequences we warned of in this newspaper.
At the time of our departure, the most obvious reason was the implementation period agreed as part of the Article 50 deal – everything would carry on as before until the end of this year, to give time to agree a future trading relationship. That’s meant no backstop, no queues at the border, no Brexit-induced economic disruption, nothing.
Even that implementation period, though, has been somewhat overshadowed by the fact of a global pandemic – a disruption absolutely no-one involved in Brexit factored into their calculations.
Now, a year that was supposed to be dominated by UK/EU trade talks is instead a series of pitched battles between each country and a novel disease. The UK is faring particularly badly, with an estimated 62,000 excess deaths since the crisis began and the nation still under heavy lockdown restrictions.
We now know that regardless of whether Boris Johnson negotiates the Brexit deal of his wildest imagination or we crash out with no deal, the UK – like most of the world – will be in a recession so heavy that the 2010 crash will look like a blip, and that we will be dealing with the economic aftermath of Covid-19 for the rest of this decade, and likely for longer.
Everything about this urges caution: every organisation in the UK is strained to capacity. Budgets are stretched, businesses are on the brink, management time and energy is focused on the crisis, government energy even more so – we do not need to load ourselves with another burden. We are dealing with enough.
To anyone agreeing with that, there is of course a simple route: we can, until June 30 this year, extend the current ‘implementation period’ and hold the Brexit status quo for either one or two further years.
This does not and can not frustrate or cancel Brexit. The UK has already left the EU. To rejoin, it would have to apply as a new member state. This remains true whether we attempted to do so now, next year, or in five years, whether we extend or not.
It is a delusion – a paranoid or a wildly optimistic one, depending on your perspective – to think delay means anything other than delay. Without a time machine, we cannot stop what has already happened.
Unfortunately, among those with the paranoid delusions about what an extension means are the current residents of Number 10 – who not only remain dead set on refusing an extension, but who also seem to think anyone suggesting otherwise is an enemy of the 52%.
Where the rest of us see a needless extra burden on UK businesses and the UK government – not to mention on member states who have better things to do than negotiate or prepare for no-deal right now – Number 10 sees an opportunity.
Some advisors believe coronavirus offers an opportunity: get the ‘clean break’ done amid the crisis and any disruption and economic damage will just be lost in the noise and chaos of coronavirus. As wisdom goes, it’s up there with suggesting we might as well feed someone we love arsenic after a heart attack, as they’re ill already and we’ve got the poison on-hand.
Not only do we risk killing them off for absolutely no benefit, we’re still likely to get caught: if the UK economy suffers more than others across the world thanks to a combination of Brexit and coronavirus, this will show up in GDP figures, whether the government likes it or not.
And if advisors think necessary queues for supermarkets – and debatably-necessary shortages on shelves – will have added to the public’s patience for self-inflicted queues and shortages, they have misread the British public nearly as badly as when they thought suggesting going to Barnard Castle for an eye test was a brilliant communications strategy.
Number 10’s logic is based on the idea that the UK and EU are not really that far apart on a deal – some in the PM’s team believe that the level playing field is the only real sticking point, and the rest can be quite easily hammered out.
The EU stands ready to disabuse them of that notion, again, with substantive disagreements in as many as 10 major policy areas including, inevitably, fishing.
Patience on the EU side is dimming: the EU cannot force an extension if the UK doesn’t ask for one, parliament doesn’t have the numbers to overrule Johnson, and once June 30 has passed the UK leaves its interim arrangements on January 1 whether there’s anything to replace them or not.
If progress in the talks isn’t a real prospect, then why not write them off and just concentrate on preparing EU states for the disruption the exit will cause? If Number 10 is hoping this is the moment German car manufacturers will finally ride to the rescue, they will yet again be disappointed.
The result will be UK businesses having to prepare for a whole new shock and crisis in the middle of a huge existing crisis – able to do nothing to avert either. That will be tough for UK-based businesses, but risks making decisions all too easy for international businesses.
Coronavirus, and the recession it will cause, means many global or European businesses will be looking at which outlets to close, which factories to shutter, which workers to lay off, around the planet. Just as they are doing so, the UK is going to impose substantial transaction costs to manage a no-deal end to the implementation period – and the prospect of lower long-term profits thanks to Brexit.
By forcing through Brexit at this idiotic place, Johnson and Dominic Cummings are about to make the UK the most attractive target in the world for businesses – businesses looking to cut jobs and close factories.
Before The Thick Of It served as our fictional guide to UK politics, there was Yes Minister – which saw hapless minister Jim Hacker face off against civil service supremo Sir Humphrey Appleby.
The latter would regularly spar with and outwit the former, frustrating his plans with constant smarm – but just once, came a rare moment of sincerity as Hacker was determined to go forwards with a distinctly ill-advised idea: ‘If you’re going to do this damned silly thing,’ he concluded regretfully, ‘don’t do it in this damned silly way.’
Urged on by the advisors around him, deaf to the protests of businesses and civil servants alike, Johnson is set to do the damn silly thing in the silliest way imaginable – dousing the country in petrol while the world is on fire.