Today’s @obr report on the dangers of a no-deal, no-transition #Brexit should be a massive wake up call to anyone thinking this would be just another political event.
If you doubt this is a cliff edge, these negative statistics paint a pretty stark picture... #obrfiscalrisks
No-deal means £30billion pa black hole from next year+ as tax revenues fall, threatening vital public services. And 12% of GDP onto national debt by 2023. @OBR_UK add: “There is no war-chest or pot of money set aside” and this is a “relatively benign” scenario “compared to some”!
Value of £pound falls 10% because of no-deal weaker competitiveness & inflation rises as a result. An immediate hike in tariff & non-tariff barriers hits UK exports. Pensions are hit by adverse market reaction in equity prices.
Wages & salaries 2.6% lower at the start of 2024..
The PM told #Marr the Canada trade deal (CETA) & draft US deal gave some hope that UK financial services access could be similar to existing ‘passporting’ rights with EU because “financial services are referenced” in those texts. But those ‘references’ are pretty derisory…
The EU-Canadian deal does not allow financial services firms to ‘do business’ or ‘solicit’ in each other’s territories without licence (Article 13.7.6). There just aren’t the automatic rights to establish business activities that UK currently has across Europe via #Single Market
Trump administration will not allow UK financial services access to American markets because any trade deal done at federal level won’t override local state-by-state licencing, insurance regs, banking licence conditions etc. So UK firms won’t be able to trade freely in the States
Preventing a Brexit disaster - and the austerity this entails - requires more than the #CustomsUnion alone. So here’s a few reasons why Labour’s frontbench must, as a minimum, now also back the #SingleMarket (other than for the famous ‘four freedoms’):
Yes a Customs Union is needed. It helps 20% of our economy. For the other 80% (and growing!) of our economy, which is in ‘services’, we need the Single Market. The right to export UK service expertise is vital.
With 11% of our tax revenues coming from the UK financial services sector (£66bn), we need the Single Market so it can trade on the same basis as financial firms from the other 27 countries. We can’t pay for our NHS, schools, welfare support without this revenue.
If Britain’s leaving the EU, we’ve surely GOT TO know what the replacement trade deal looks like - so we know where we’re heading? Trouble is, this Government’s ‘implementation’ phase is woeful. Putting a plank on the cliff edge doesn’t make the fall easier. #transition#Brexit
Britain really should settle the new trading partnership before ‘exit day’, because leaving without any guarantees expands uncertainty for business & undermines economy. Why are Ministers sanguine about allowing just 6 months to negotiate future relationship? #transition#Brexit
Some hard Brexiteers actively want to dive off the cliff into ‘no deal’. But to see others only now realise that exit in March 2019 inevitably means the UK will be a rule-taker subject to existing EU rules reinforces how little they thought this process through before referendum