London government ministers and Brexit politicians don’t like to hear the Independent Office for Budget Responsibility (OBR) the professional economic organization CalculationBrexit will reduce UK economic growth by four per cent in the long term, while the coronavirus financial times Local policy expert. Pro-Brexit advocates have developed a doubly safe defensive response to unpleasant realities.
They do not simply sweep away what they do not like, but rather create an atmosphere in which their political opponents feel bad for criticizing the noble cause of British independence. Pro-government politicians are talking about people who no longer want to hear the news of Brexit, which has finally been shut down, a fact, unless they can polish Brexit to the sky. Their critics, the surviving Departed, are derided as angry, ‘remoaner’. Thus, it is not easy to hold the Brexit government responsible for its activities.
The OBR estimate is not just a scientific computation. Weak income can already be seen in spending and tax cuts. The government has had a hard time sweating economic growth forecasts of 2.1, 1.3 and 1.6 per cent for itself for the three years to 2022. The government and its head, Boris Johnson, must be open about the cost of Brexit for a clear view. Exiting the European Union was, after all, a political project, and those who expected it benefited from tighter immigration and a faster vaccination campaign than the EU.
Needs a make up
However, when you need to explain the troubling phenomenon of labor shortages, it is not necessarily a pity for the government to talk about the huge benefits of Brexit. Good examples include new foreign trade agreements, but they are mainly agreements to maintain previous terms. A particular problem for budget professionals is how to sell measures to prove the victory of Brexit.
The end of the story so far is that despite the hype for success and reference to the pandemic, according to a survey by YouGov, 61 per cent of voters believe the government is mismanaging Brexit.
The calculations on which the OBR estimate is based take into account the independence benefits. With regard to tax changes, for example, it is noted, as in previous measures, that they bring in less than a fifth of what the Ministry of Finance expects from them, since companies are not significantly affected by these incentives. In terms of foreign trade, the impact of the trade agreement with Australia, served by a major fraud, is equal to 0.01 percent of GDP. Meanwhile, data shows that trade with the European Union has fallen by 15 percent.
big cut
Minus 4 per cent in the OBR forecast represents lost income of £80 billion a year based on current GDP, leaving the budget with a loss of £32 billion a year. The former can be translated into lost or unborn jobs, and the latter into lost budget payments. That is the point for the country and perhaps the ruling conservative party as well.
At the moment, due to the weak opposition and fan base of the Brexit camp, all this cannot be translated into some kind of pressure for political change. Johnson, like any politician, wants to spend more on less taxes. Brexit narrows this possibility – it wouldn’t hurt to try to face the consequences honestly.
An expert in a British trade newspaper said whether Britain’s eventual Brexit is linked to economic hardship in voters’ minds is an open question, but the country is facing a financial loss it cannot afford. Johnson’s government is leading the UK down a path shrinking due to Brexit, when in fact this is exactly the Brexit implementation it has sworn to.
