Breaking News: UK’s Conservatives Whistle Past the Brexit Graveyard
UK Chancellor of the Exchequer Jeremy Hunt struck a “We Told You So” for the audience at the Conservative Party Conference.
The Office of National Statistics…had been saying we were the worst performing large European economy since the pandemic.
But we weren’t the worst. We were one of the best. Since the pandemic we’ve recovered better than France or Germany.
We’ve grown faster than both of them since we left the single market.
It was a telling moment. Hunt — who knows the reality of the British economy, who is smart enough to know its likely course — was not going to inform the Conservative faithful. He, and the rest of the Sunak Government, are going to keep whistling past the Brexit graveyard.
THE CHANCELLOR’S MEMORY LAPSE
The thin reed for Hunt’s declaration was a revision of the numbers by the Office of National Statistics on September 29.
In August, the ONS had estimated that the British economy was still 0.2% below its level at the end of 2019. But a month later, it altered the assessment to 1.8% above pre-pandemic GDP.
That adjustment meant the UK finally escaped the basement of the G7 nations — US, Canada, Japan, Italy, France, Germany, and Britain — in economic performance. Hunt posed, “To all the pessimists and declinists who’ve been talking us down, we say this: don’t bet against Britain – it’s been tried before and it never works.”
The Chancellor’s sleight-of-tongue was to strip out all the context from the figures. Beyond the promotion of the UK, now ranking 5th among the G7 countries, to “one of the best”, Hunt ignored the reasons why Berlin and Paris were struggling.
As the Organisation for Economic Co-operation and Development noted last month, Germany has been especially exposed to the slowdown in China’s economy because of its extensive trade and investment links with Beijing. And the Germans are in the midst of a historic economic and energy transition, weaning themselves off dependence on Russian oil and gas.
Like the UK, France was hindered early this year by issues with supply chains and soaring energy prices. But Hunt conveniently forgot to mention that the French economy rebounded in the spring, and is now projected to be in a much better position that the UK in 2024.
Indeed, the Chancellor had a series of memory lapses. With UK interest rates still at 5.25%, compared to 1% in December 2021 and 2.25% a year ago, economists are projecting a mild recession with up to 0.5% contraction in GDP in coming quarters. In September, private sector activity collapsed at the fastest rate, outside the COVID pandemic, since the financial crisis of 2008-2009.
Last week, the International Monetary Fund completed the shredding of Hunt’s script. The UK will no longer be “one of the best” in 2024. Instead, its growth in GDP will again be bottom of the G7 nations, with an estimated 0.6% training the 0.9% and 1.3% for Germany and France, respectively.
DON’T MENTION THE B-WORD
Of course, Hunt was more interested in delivering the comfort of illusion rather than the chill of reality to the Conservative gathering, hoping to push back the incoming wave of electoral defeat in 2024.
What was interesting was that the illusion no longer includes “Get Brexit Done”. His only invocation of the B-word was not over supposed progress, but in an awkward jab at the Liberal Democrats, “The Lib Dems are wrong to want to overturn a democratic Brexit vote. But they still need a cashpoint to withdraw their euros.”
Prime Minister Rishi Sunak did rework Hunt’s proclamation as “Since leaving the single market, we’ve grown faster than France and Germany. Not despite Brexit, because of Brexit.” He warned about those who want “to align us with the European Union so that we never seize the full opportunities of Brexit”.
Once again, he never explained what those “full opportunities” are — an appropriate omission, given that the office of Minister of Brexit Opportunities, created in March 2022, has been vacant for the past 13 months.
Yet if the Conservatives are whistling past the graveyards, the UK’s opposition parties are afraid to acknowledge that it is there.
One of the Liberal Democrats’ Parliamentary candidates, Caroline Voaden, dared to venture on eve of the party conference, “I would love to see the party being much more honest and braver about addressing the elephant in the room.”
That prompted party leader Ed Davey to shift into a full-speed backpedal. He looked forward to talking about raw sewage being pumped into rivers and the right of people “to see their GP within a week”. But as for Brexit, well, voters “aren’t talking about Europe”, he explained.
Hamas’s mass killings inside Israel, followed by Israel’s mass killings inside Gaza, sent Labour leader Keir Starmer’s party address to the inside pages.
But even, after a protester doused him in glitter, Starmer wasn’t seeking a Brexit spotlight. It only flickered once, as he derided the Conservatives “when they told you, to your face, that Brexit would only bring benefits to your business”.
Labour’s press release on a plan to “Get Britain’s Future Back” never mentioned Brexit. Or the European Union. Or Europe.
FROM THE GRAVEYARD INTO THE GRAVE
In an interview with the Financial Times last month, Starmer pledged a rebuilding of relations with the EU, including revision of the Trade and Cooperation Agreement.
Almost everyone recognises the deal [Prime Minister Boris] Johnson struck is not a good deal — it’s far too thin. As we go into 2025 we will attempt to get a much better deal for the UK.
However, he has been vague on the “better” terms, apart from an a agreement to reduce onerous border checks on animals and food and a deal on recognition of professional qualifications. The economic elephant in the UK’s room — rejoining the Single Market — remains under a large, Don’t Look Here blanket.
It may transpire that Starmer and Labour are just treading carefully for fear of scaring off voters still caught up in the Get Brexit Done illusion. Once in power, they may pursue the necessary negotiations to get the UK back into a productive economic bloc, if stopping short of a prospective return to the EU.
But it may transpire that Starmer will remain transfixed by the political fear of ending the illusion. While telling the Financial Times about his wish for “a closer trading relationship”, he ruled out the Single Market and the Customs Union as well as EU accession. Instead, he wandered in a vague future of even vaguer aspirations:
“We have to make it work. That’s not a question of going back in. But I refuse to accept that we can’t make it work. I think about those future generations when I say that.
I say that as a dad. I’ve got a 15-year-old boy and a 12-year-old girl. I’m not going to let them grow up in a world where all I’ve got to say to them about their future is, it’s going to be worse than it might otherwise have been. I’ve got an utter determination to make this work.
And if it is that vagueness which transpires, rather than the hard work of economic and political re-engagement, then this won’t just be Conservatives whistling past the graveyard.
It will be the 66 million people of “Great” Britain — Northern Ireland’s 2 million have the sanctuary of remaining in the economic EU — jumping into the grave.