Brexit

UK’s trade with 70 countries will ‘fall off a cliff edge’ after Brexit unless Government acts urgently, MPs warn

This time next year we’ll potentially be heading for the exit door and this article makes me realize just how little progress we have been able to make. I fear for the impact of this un-readiness on rural economies. This article tells us:

The UK’s trade with more than 70 countries will “fall off a cliff” after Brexit, causing “significant” economic problems, unless the Government takes urgent action, MPs have warned.

The International Trade Committee said ministers need to “urgently” clarify how they will “roll over” trade deals with other countries that the UK currently has access to via the EU.

The Government’s failure to provide key details of this process will work is “disturbing” and risks causing a major hit to the economy when Britain leaves the EU, it said.

Ministers have said they intend to transfer the deals the EU has with more than 70 countries into new, bilateral deals between the UK and those countries after Brexit.

This would ensure Britain retains access to these countries’ markets even though it will no longer be a member of the EU.

However, the International Trade Committee said the Government must provide “a legally watertight and practically viable strategy”, warning there is “an urgent need for clarity” on the matter.

UK economy is ‘weak and stable’ with 50% chance of another recession in five years, says Office for Budget Responsibility

Notwithstanding the dire warnings about the impact of Brexit perhaps there is some cause for mild optimism in this judgement. This story tells us

The UK economy has slowed down in 2017 as higher inflation has hit disposable incomes and many firms have cut back on investment due to Brexit-related uncertainty.

By contrast, growth in the rest of the advanced world has picked up strongly.

In November the OBR dramatically slashed its UK productivity growth forecast over the next five years, prompting deep cuts in forecast for tax revenues too.

Productivity actually bounced back in the most recent figures, expanding by 0.9 per cent in the third quarter of 2017.

But Mr Chote (of the OBR) urged caution about calling an end to the UK’s post-financial crisis productivity malaise.

IMF downgrades UK growth forecast on Brexit uncertainty

Lets hope all this sort of doom-mongering subsides next year!! This story tells us:

The IMF has cut its UK economic growth forecast, blaming Brexit uncertainty.

The Fund expects growth of 1.6% this year, down slightly from its previous forecast of 1.7%. It expects growth to slow further next year, to 1.5%.

IMF chief Christine Lagarde said uncertainty over the Brexit deal was causing UK firms to delay investment plans.

She also said rising inflation, caused by the fall in the pound, and stagnant wages were squeezing spending power.

Ms Lagarde said that the government had made “significant progress” in reducing the deficit.

But she added that relative to growth in the rest of the world, “the UK is losing out as a result of higher inflation, pressure on wages and incomes and delayed investment”.

“If you look at investment alone, with 2.1% of GDP in investment, with the global economy as it is, and the space the UK economy has in that global economy, it should be rolling at 6%.”

MPs feared a David Davis cover-up. Worse, he had nothing to hide

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The expectation in my local government career was that we should pursue an evidence based approach to policy….. This article tells us:

With its Brexit strategy hurtling off the rails, this could have been a timely moment for the government to reassure parliament about the existence of a well thought-out plan B.

Instead MPs were invited to take a leap of faith on Wednesday when the Brexit select committee asked David Davis to explain what had been done to assess the impact on British business of abruptly leaving the EU.

“I am not a fan of economic models because they have all proven wrong when you have a paradigm change,” said the Brexit secretary. Because the government wanted a comprehensive trade deal, he insisted, “the usefulness of [sectoral] impact assessments would be near zero”.

The committee had called Davis to give evidence because it feared a cover-up. Davis and other ministers had spoken previously of sectoral studies that helped assess the “impact” of leaving, so Labour asked to see these “impact assessments” fearing they contained some scary conclusions.

Davis took the committee on a semantic tour to explain why the 850-pages he has produced do not amount to what MPs thought they were getting. “Just because you use the word impact doesn’t make it an impact assessment,” he said.

But what started out as a fear that the government was hiding the warnings of civil servants, or that dodgy dossiers had been sexed up to say what ministers wanted, has turned out to be something far worse: the absence of any planning, nefarious or otherwise.

Whitehall insiders confirm that Davis is not wrong. One who has seen more than half the studies, says they were sent to the committee in an almost entirely unredacted form. They highlight the vulnerability of many industries by looking at their dependence on European markets or regulation but they do not attempt to forecast what could happen next.

Even more alarmingly, Davis attempted to excuse this black hole at the heart of government because this was all just too difficult to bother. “The real problem of conducting an impact assessment on say, financial services, is the sheer range of potential outcomes,” he said, saying it would divert precious resources.

UK employment falls for first time since aftermath of Brexit vote

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Commodity price driven inflation which is likely to make more interest rate rises punitive for those of limited means now accompanied by the start of a drop off in employment – confirmed as a possible trend by a decline in unfilled jobs – all makes me nervous about the future economically. Worth remembering that its less than 18 months since we voted to leave the EU….

Signs that Britain’s long employment boom has come to an end emerged on Wednesday as official figures showed a drop in the number of people in work, a fall in full-time employment and a decline in the number of job vacancies.

After a record-breaking run, the The Office for National Statistics (ONS) reported the first fall in employment since the immediate aftermath of last year’s Brexit vote.

The ONS said the number of people employed had fallen by 14,000 in the three months to September to just over 32 million.

While the number of people in work was still up by 279,000 on a year ago, the ONS said it was the first fall since the slight reduction in the quarter ending in October 2016 and the biggest drop since the April to June period of 2015. The employment rate was cut from 75.1% to 75%.

Further evidence of a weaker labour market came from a fall in job vacancies, a 29,000 decline in the number of full-time jobs and an increase in the number of part-time workers saying that they would like to have full-time employment.

Brexit: Government spending millions on preparation for no deal, minister admits

I feel a self-fulfilling prophecy coming on….

The Government is preparing for a no deal with the EU with over £250m having already been pledged this year for exit preparations – including leaving without an agreement – a Brexit minister has said.

Steve Baker said it was “responsible” to spend to prepare for all outcomes.

Speaking in a Commons debate, he said: “To support departments the Treasury has committed over £250m of new money to departments like Defra, the Home Office, HMRC and the Department for Transport in this financial year for exit preparations – including for no deal.”

UK and EU formally inform WTO of post-Brexit tariff quota plan

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This article suggests when we raise our heads from our own obsession about what happens next in terms of our relationship with the EU there are some big beasts circulating with their own agenda for us in the “wider world”…

Britain and the EU have formally informed members of the World Trade Organisation how they plan to split up the EU’s tariff quotas and farm subsidies after Brexit in a plan already rejected by the White House.

In a joint letter, the two parties, who are involved in intense negotiations over Britain’s departure from the EU, said they had come to an agreement on a key aspect of trading relationships with the rest of the world after Brexit.

Under WTO rules, country-specific quotas permit low-tariff imports, such as butter and meat, up to a certain volume, after which higher tariffs can be applied. The joint plan suggests the EU’s existing agricultural quota commitments will be “apportioned” based on historical trade flows, and the current ceilings on support for farmers will be maintained.

After a leak of the letter this month, however, the UK has been told that the arrangement is unacceptable to the US and other WTO members who wish to force the UK to open its market further to their farm products

Farming must not be ‘sacrificial lamb’ in trade deals

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As the Brexit tempo rises the farming lobby is coming over the hill…….

British agriculture must not become the “sacrificial lamb” during trade negotiations on Brexit, the deputy president of the NFU has warned. Concern is growing among farmers that the UK government may seek to sacrifice agriculture to strike free trade deals with countries including the US and Australia. During a debate on “What next for food and farming after Brexit?” at a Lib Dem conference fringe meeting in Bournemouth, industry leaders argued this must not be allowed to happen.

Theresa May left red-faced after business leaders refuse to publicly support her Brexit strategy

I would love to see some more detailed fact based analysis of the implications of Brexit for rural themed and based businesses. This article gives me a hunger pang for facts and evidence led policy. It tells us:

Theresa May has been accused of an embarrassing own goal after business leaders refused a plea to publicly declare their support for her Brexit strategy.

A letter – asking top companies to say they “welcome” the Government’s bid for a transitional deal, to cushion the exit – was leaked to Sky News, apparently after some refused to sign it.

They were also asked to agree that the legislation before Parliament to prepare for withdrawal would “make Britain ready for life outside the EU”.

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