Thread by @pmdfoster

🚨🚨NEW: rare Labour intervention on #brexit debate - Rachel Reeves @RachelReevesMP tells me in @FinancialTimes that “arrogant” Tory govt is “disturbingly relaxed” about hit to exporters/SMEs from new red tape as @OBR_UK spells out costs. Stay with me/1

on.ft.com/327nRVb

@RachelReevesMP @FinancialTimes @OBR_UK So Labour have generally shied away from #brexit consequences debate -- politically too many minds are made up, so it's a lose-lose issue - but back in March, after Budget, Reeves wrote to OBR noting lack of impact assessment by @RishiSunak
of #Brexit /2

https://twitter.com/RachelReevesMP/status/1368476449724829697

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak The OBR chair Richard Hughes replied to Reeves on March 29, setting out in detail it's assessments to date on impacts of #Brexit - which it reckons at 0.5% short term to GDP in 2021 and 4% productivity hit over longer term (15 years) /3

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak On jobs, the OBR doesn't see hit to employment BUT it says that #brexit will lead to lower wages as a result of workers shifting to lower productivity occupations /4

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak This is because, says the OBR, the "non tariff barriers" thrown up by EU-UK trade deal make it harder for UK business to "exploit comparative advantage"

(Hughes is too polite to point out that @BorisJohnson announced the deal by saying it didn't create "non-tarriff barriers")/5

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson But what does that mean in plain English?? I asked @JohnSpringford economist at the @CER_EU to explain...it applies to both services and goods, where the difficulties thrown up by trade barriers force individuals into lower-productivity, lower earning work /6

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson @JohnSpringford @CER_EU He gave two examples - the UK high-value shellfish industry is crimped by barriers to trade (we've seen volumes fall) and so some workers/boats disappear out of the industry into other, lower productivity occupations in say hospitality sector or care work /7

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson @JohnSpringford @CER_EU Similarly barriers to labour (the ending of the 'au pair' scheme) forces some of those who were liberated into the work force by having affordable childcare to go back into the home - less productive economically speaking /8

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson @JohnSpringford @CER_EU You may recall that David Frost @DavidGHFrost doesn't agree with any of this - per his speech in Brussels in Feb 2020: (tl;dr)

- NTBs are exaggerated
- productivity will increase
- trade deals/deregulation will offset costs /9

no10media.blog.gov.uk/2020/02/17/dav…

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson @JohnSpringford @CER_EU @DavidGHFrost On the trade deals point, the @OBR_UK is also not sharing Frost optimism, noting that most deals replicate EU deals, and will only have a "very small" impact - so recent UK-Japan deal worth +0.07% over 15 years. /10

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson @JohnSpringford @CER_EU @DavidGHFrost This has Reeves piling in -- describing it as "arrogant in the extreme" that the govt isn't doing more impact assessments, and looking to better mitigate impacts of these NTBs. /11

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson @JohnSpringford @CER_EU @DavidGHFrost The government says it IS supporting business with a £20m SME Brexit support fund, 300 trade advisers and the TCA "protects high quality jobs and investment right across the UK and ensures that businesses continue to trade effectively and sell to their customers in the EU." /12

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson @JohnSpringford @CER_EU @DavidGHFrost It adds that it is also "impossible for a single model, number or scenario to capture [the deal's] complexity or represent the varying impacts that will be felt across different parts of the economy." /13

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson @JohnSpringford @CER_EU @DavidGHFrost On that last point the @OBR_UK rather agrees, noting that it will be "difficult to disentangle" #Brexit impacts from "the more dramatic shock to the public finances associated with the coronavirus pandemic". Ditto with role #Brexit has play in apparent exodus of EU citizens /14

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson @JohnSpringford @CER_EU @DavidGHFrost Which arguably explains why Labour has shied away from #Brexit politics post Jan 1 2020, since if it's all masked by #COVID19 anyway, then no mileage in alienating Brexit voters by lecturing them about OBR forecasts, even Brexit will indeed have made us economically poorer /15

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson @JohnSpringford @CER_EU @DavidGHFrost Where there might be more mileage -- as impacts land on particular industries and places (coz some will feel it much more than others) is in demanding UK govt does more to tackle/address problems caused by the deal /16

@RachelReevesMP @FinancialTimes @OBR_UK @RishiSunak @BorisJohnson @JohnSpringford @CER_EU @DavidGHFrost That may be a few months off - but as we open up from #Covid19 then there may be elements (services, travel, Northern Ireland, certain industries) that do cry out for constructive engagement with the EU - youth mobility deals spring to mind. But that's all for another day... ENDS