Wednesday, 18 December 2019

A dangerous complacency

Labour has a problem. Strip away the far left elements that voters find so repellent and you still have nothing much to work with. Of the contenders lining up to replace Corbyn, there isn't much in it. Labour has to go through a long process of introspection and reformation; a time in which the factions will be at each others throats, guaranteeing them a decade in the wilderness. Nobody serious would even want the job. It's better to pick up and run with whatever is salvaged from the wreckage.

That, though, is bad news for all of us. I've never voted Labour and I never will but as ghastly as Labour is, coming a close second is an uncontested Tory party high on its own self-regard. Right now there is a dangerous complacency as Johnson cements his position. The Brexiters think they have won the day - and to a point they have, but only to a point. They are not out of the woods yet. We have not yet left the EU and even on the formal Brexit day we still face months of transition in which we'll be living in a state of false security. The Brexiteers seem to believe that a stocking Tory win insulates us against the economic realities of leaving the single market. They're in for a shock - as are we all.

Much has been written about the dangers of a no deal Brexit, and we will see a pastiche of that debate as trade talks pick up with the threat of another cliff edge looming. The problem, though, is that if Johnson is as serious as he looks about a full blooded rapid departure from the single market then even if there is a deal covering the basics on tariffs and quotas, the effect will be almost as bad as if there were no deal at all. The danger of jammed ports and grounded aircraft may have passed and we've had enough time to forge a half way functioning contingency operation, but many of those issues as detailed in the Notices to Stakeholders remain just as much a concern with a deal as without.

The problem there, I suspect, is that the consequences will be masked by a flurry of surge activity as the economy adapts to the new realities, meaning the slow motion trainwreck will go undetected for some months, perhaps even more than a year. But there will be consequences. Business will have to spend a lot of money adapting, and we may even seen a recruitment boom as they reorder their affairs, but this is reactive unproductive work in preparing for a more hostile trading environment. We could be looking at an off ramp rather than a cliff edge, but either way that wake up call is coming.

That is when this government finds itself far out of its depth, being that their spending and development plans are predicated on the the status quo (as were Labour's) with no one taking into account that we're about to torpedo our European services exports with nothing in the offing as an alternative. The Tories appear to be betting the farm on a deal with the USA, relying on the wholly unreliable Trump whose presidency looks to be circling the drain. We then have internal stresses caused by the Northern Ireland settlement to deal with an a twitchy politics north of the border. If the Tory shine lasts more than a year I'll be surprised.

Though the northern working classes may have pivoted to the Tories (so the narrative goes), much is contingent on Westminster making credible gestures to the north. But since the money men have moved in to take control of Brexit, our trade policy is being driven by an agenda to break the city out of the EU regulatory sphere at the expense of trade in goods and non-financial services. Johnson will then find there's no money in the kitty to splurge on the northern regions. He won't be ending austerity any time soon, unless he borrows like mad, which he probably will, so the net effect will be only marginally less dreadful than Corbyn - and when it comes to trade policy, Tories are every bit as arrogant and illiterate as Labour. This is not going to be pretty.

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