ECONOMY

Brexit didn’t just cost us money: it deprived us of solidarity in a crisis | William Keegan

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Brexit was always going to be a geopolitical and economic disaster – a once-proud nation cutting off its nose to spite its face. The daily tragedy of Putin’s laying waste of Ukraine has highlighted the shortsightedness of Johnson’s geopolitical misjudgment in leaving the European Union.

As that great one-nation Tory Remainer Michael Heseltine says: “Our continent faces a threat as severe as anything since the end of the cold war. I am ashamed that the country that in my lifetime saved European democracy has now absented itself, and that others must now determine Europe’s response.”

I am sure that my old friend the good Lord Heseltine means no disrespect to the “others” – our former partners in the EU. Like millions, he would like us to be in there as Europe units itself in the face of the crisis. How ironic that members of the former Soviet bloc, which we encouraged to join the EU, are still there, whereas the bar-room joke is: who is going to join the EU first – the UK or Ukraine?

The UK’s Brexit-induced economic disaster has not gone away simply because attention is understandably devoted to what is happening in Ukraine. And, of course, Pelion has been piled upon Ossa with the extra economic damage wreaked by Putin’s assault: the aggravation of shortages of energy supplies and the concomitant rise in an already disturbing inflation rate. It’s going to be a rough year for the British and many other economies.

The economic damage to the Russian people from this invasion will be far, far worse. In the interests of his wild aims, Putin is prepared to inflict untold damage on his own people, as well as on the Ukrainians.

Now, in order to switch off from such daily horrors I like reading, and re-reading, novels. I have recently been re-reading Reuben, Reuben by the little known – in this country – American humorist Peter De Vries.

In part one, the narrator – one Spofford, a New England chicken farmer – bemoans the outcome of the family’s decision not to sell chickens to “New York commuters”.

“Since commuters were two-thirds of our business,” Spofford reflects, “it don’t take no Einstein to figure what this retaliation is costing us. Talk about cutting off your nose despite [sic] your face.”

Johnson, Farage and their Brexit cronies – encouraged by Putin and his cronies – managed to mislead the British electorate into voting Leave and thus departing from the world’s biggest barrier-free market when it was just 21 miles away. The British economy has not exactly lost two-thirds of its business, but it is now widely recognized that the hit has been substantial, with exports running almost 20% below what would have been expected in the absence of Brexit. Moreover, the many demands on Chancellor Sunak’s budget are not exactly alleviated by the impact on tax revenues of a Brexit-induced 4% reduction in GDP. The result? Unpleasant cuts in essential services.

Which brings us to the chancellor’s recent pronouncement in the annual Mais lecture. Amid the usual platitudes about higher productivity and lower taxes was Brexiter Sunak’s emphasis on “a simple, enduring proposition: that the best way to organize our economy is around free-market principles”.

Get it? So we leave the best free market in which we have ever participated – and which we helped to construct – in order to enjoy mysterious “freedoms” (since when, by the way, was “freedom” plural?), and the key to future economic progress is “investment”. In a passage that provoked a hollow laugh, Sunak asked: “Why is investment so low?” He added: “The problem is no longer the government: businesses simply aren’t investing enough.”

Now, a glance at a number of surveys should have told the chancellor that the main reason why businesses are not investing enough is that they have been hit by Brexit. It comes up time and time again.

Which brings us back to the chief culprit. The government has decided that we just have to live with the virus; and people are concluding that the ill wind from Moscow means that for the moment we shall also have to carry on living with “the Johnson”. But the charge sheet has not disappeared, as we are reminded when the prime minister complains that Putin is breaking international law. It takes one to know one.

As a student of Latin, Johnson is no doubt familiar with that great observation in Tacitus’s stories about another incompetent leader, the emperor Galba: “Maior privato visus dum privatus flees, et omnium consensu capax imperii nisi imperasset.” (“He seemed much greater than a private citizen while he was one, and if he had never been in charge of government everyone would have agreed that he was fit to govern.”)

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