JOE GILL: Brexit will hurt ordinary people most

A large squadron of chickens is coming home to roost around Brexit.

Every passing week, hard evidence is emerging, across a range of industries, showing the damage being inflicted on the UK economy by its decision to leave the EU.

The data is spilling out from individual companies, trade organisations, and from national statistics.

Every region and sector of the UK economy is being affected.

It is these hard facts, rather than the verbiage from the Brexiteers, that will ultimately determine how this plays out.

A selection of the news-flow items best illustrates how bad things are going.

First, car sales in Britain fell almost 10% in January, and were down 3% in February, as consumers pull back from spending on big items, with high-octane political headlines signalling Westminster civil war.

Then, a wide set of stockmarket-listed companies noted a material decline in business activity last year and into 2018.

There is also the evidence of the head of procurement at Airbus — the Toulouse-base giant to which British firms have valuable contracts — who has warned that supply chains for its business will be affected by Brexit and it must take appropriate action to avoid the damage.

These are real developments that will impact investment, employment, and the underlying health of the UK economy.

All of it could have been avoided.

As the US and European economies began to perform strongly from late 2016, Britain convulsed itself in a political drama that has left ordinary people in a very precarious situation.

By sapping consumer and investor confidence, the Brexit process is causing untold damage to the fabric of Britain’s economy.

Any forlorn idea that Britain’s relationship with Europe can be replaced by some sort of all-singing-and-dancing trade deal was long a threadbare idea.

This week, it emerged that preliminary discussions have taken place between the UK and US transport authorities, about an air-travel deal to replace the EU-US agreement.

The European agreement took decades to negotiate and agree.

Instead of a warm outcome, these discussions produced a proposal from the US side, which would represent a major step back for UK access to the US market.

Once the discussion got into the weeds of technical jargon, it quickly became apparent that the US was in no mood to provide the type of access that EU negotiators achieved over years of engagement.

I would bet that Indian and Chinese negotiators will have a similar stance, because they see the gigantic EU economy trade deals as markedly more important than providing relatively tiny UK with terms that currently apply.

Over the coming weeks and months, you will hear a lot more about the consequences for British industry of turning away from the EU. Farmers in Britain are now much closer to the end of an era, when their invaluable subsidies, which made up the bulk of their incomes, was funded 100% by the Common Agricultural Policy.

CAP will disappear and UK farmers will rely on the diminishing pool of Westminster taxes.

The financial services companies that employ thousands in Britain, selling and administrating services across all of Europe from a UK base, will experience a draining of business, as operations are transferred to other parts of Europe.

Against this tide of bad news, I see or hear very little about incoming incremental investment to offset the negatives.

Rational investors are, at best, pausing their decision-making until there is crystal-clear clarity about where the UK ends up, relative to Europe.

More worryingly, some have already begun the process of diverting their flow of capital to other areas.

The latest mantra from the Brexit camp is that a European elite is causing all of the problems for the British.

The sad fact is that an elite in the UK political system has created this nightmare.

It is not them, but, instead, ordinary British people who will suffer most from this self-inflicted harm.

Joe Gill is director f corporate broking with Goodbody Stockbrokers.

His views are his own.


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