Jim Power: Britain's renewed Brexit hardline should concern us all

It is quite ironic that in the days since the Government was given a major thumbs down in general election, the economic news continues to improve.

Jim Power: Britain's renewed Brexit hardline should concern us all

It is quite ironic that in the days since the Government was given a major thumbs down in general election, the economic news continues to improve.

Last week we got evidence of a further welcome deceleration in house price inflation and clear evidence that the supply of housing continues to improve.

This week we got stellar news on the labour market front.

Total employment increased by 79,900 or 3.5% in the year to the fourth quarter of 2019 and total employment hit 2.36 million.

The unemployment total declined by 18,300 in the 12-month period to reach just 110,600.

This represents the 13th consecutive quarter of annual decline in the unemployment total.

It is hard for anybody to argue with such statistics.

As we continue to struggle to put a stable government together, all responsible players should recognise where we are, and the threats that a prolonged period of political uncertainty and poor policy making present.

Whichever government is put in place needs to make sure that the economic momentum is maintained, but that the fruits of that growth are utilised in a manner that will improve the quality of life of the citizens of the country.

I think that rather than simply blaming politicians for failure, we really do need to critically evaluate the role of permanent government.

For example, we really do need to ensure that the Department of Housing, Planning and Local Government, or the Department of Health are really fit for purpose?

Maybe they are, but we need to find out before we are treated to the next political tsunami.

I expressed a view last week that come what may, the UK will exit the transition mechanism at the end of December this year regardless of what sort of trade deal is done with the EU, if indeed any deal manages to be done.

Earlier this week in a speech in Brussels, the UK’s chief Brexit negotiator, David Frost, outlined the very strong approach to the negotiations that his government will adopt.

He has stated bluntly that the UK would never agree to EU oversight of its rule-making in exchange for a post-Brexit trade deal.

He believes that the whole purpose of leaving the EU was to become an independent country once again and that acceptance of EU supervision on so-called level playing field issues would defeat the purpose of the whole exercise that was put in motion back in June 2016.

Simultaneously, the French are trying to push the EU to adopt a more stringent stance with the UK and insist on the UK staying in line with EU environmental, tax and labour-related rules as they are developed over the coming years.

The EU approach thus far has been a willingness to accept the rules as they stand at the end of 2020.

The differences that these two positions would represent are pretty significant and fundamental.

David Frost also stated that the UK is willing to accept an Australian-type trading relationship, where World Trade Organisation trading arrangements would be implemented and where tariffs would apply.

The preference of the UK and indeed the EU would be for the type of trade deal that has been signed between Canada and the EU, known as the Comprehensive Economic and Trade Agreement, or CETA.

This deal has got rid of most, but not all tariffs, but they remain on meat, poultry, and eggs.

Quotas have also been increased, which is the amount of a product that can be traded without extra charges but trade in services has not been freed up, particularly in financial services.

Regardless of whether the UK and the EU ends up with an Australian, a Canadian or some hybrid model, all will change, and change utterly once the UK exits the period of transition.

Before the trade negotiations even begin, it is clear that there is a wide chasm between the UK and the EU, and even within the EU itself.

Perhaps this is how we should expect negotiations to begin, with compromises to follow, but I wouldn’t hold my breath on that.

It promises to be a challenging and uncertain process and there is no win-win possible for Ireland, unfortunately.

Damage limitation is the name of the game.

I am still astounded that general election exit poll showed that Brexit was a concern for only 1% of the electorate.

There’s nought as strange as folk.

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