Why 'it's the Brexit, stupid' should be the political slogan of our times

It was hammered home mercilessly by the campaign at every opportunity. The simple message told voters that Clinton understood their concerns on the cost of living and the economy during a recession whilst painting the incumbent, George Bush Senior, as out of touch.

At the time, the message was effective because it was a straightforward statement of the obvious that voters could see for themselves, and difficult to disagree with. Those involved in the day to day of our politics – politicians like me, journalists and others – can overcomplicate things, when, at times, the simple message and even solutions are staring us in the face.

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The elephant in the room

Over the past few weeks, the Labour government has tied itself in knots as it has tried to explain why, after going through a hard Budget with big tax rises not that long ago, we are going to have to do the same again. Even Labour’s most steadfast supporters would struggle to argue that this has been handled well by the residents of either 10 or 11 Downing Street.

At a time when the UK is misfiring politically and economically, alongside a collapse in trust for the traditional Westminster parties and UK democratic institutions, maybe it’s time to address the elephant in the room of British politics. It is one that everyone else can see across Europe; and opinion polls tell us the public is way ahead of Westminster. To paraphrase James Carville, it’s the Brexit, silly.

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Analysis by Cambridge Econometrics, commissioned by the Labour Mayor of London, estimates that by 2023 gross value added in the UK was already 6 per cent (£140 billion) lower, than if the UK had stayed in the EU. That is estimated to get worse and grow (or not as the case maybe) to over 10 per cent (£311 billion) lower by 2035.

That is costing the Treasury, and therefore us as taxpayers, £40 billion a year. John Springford, of the Centre for European Reform, found “a large chunk of [the tax rises] would not have been necessary if the UK had voted to remain in the EU or chosen a softer form of Brexit”.

The latter is particularly galling since much of the damage of a hard Brexit driven by Boris Johnson’s populist agenda, and now remarkably backed by Labour in government, was never on the ballot. All the while the UK continues to pay billions more in a Brexit settlement to make matters worse for themselves – money that is not being invested in public services.

Most firms struggling with post-Brexit rules

Alongside the damage and the increase in your taxes due to Brexit, the UK has hobbled itself in terms of growth. In a difficult environment, the UK has decided to make life tougher for itself. Brexit was always bad for business, increasing red tape as our competitors in Europe bring down barriers between every other democratic European state.

More than half of UK firms say they are struggling with the new rules and more than three-quarters believe even the new Trade and Cooperation Agreement with the EU is not helping them with sales or growth.

The Washington-based National Bureau of Economic Research published a report this month on the economic impact of Brexit. It found leaving the EU “had a significant impact on the UK economy”.

The report added that investment was down significantly in the UK and that, overall, “our analysis of cross-country macro-economic data shows that the UK has performed materially worse than other countries since 2016, which it seems reasonable to assume is mostly a Brexit affect”.

We were warned

The double whammy of Brexit is hitting growth and hammering the public finances at the same time.

None of this was unforeseen, Treasury analysis produced in the aftermath of the vote, that Keir Starmer and I both fought hard to have released to MPs, showed that Brexit was always bad news for the UK economy. The harder the Brexit, the worse the damage.

These reports have been confirmed by the Office for Budget Responsibility which has flagged that exports will be lower as will GDP and new trade deals will do little to offset the damage.

Later than most, in recent days, Labour have returned to the arguments some made in opposition and, after a year and a half of Brexit omerta, are now talking about it, a little. Last month Health Secretary Wes Streeting said, “Brexit is a problem whose name we now dare speak” and the Chancellor has talked about its “severe and long lasting” impact.

High price of Brexit folly

Yet for all their words, there is absolutely no sign of action. In fact the Treasury under Labour has not even carried out any fresh analysis. As the UK Government rips itself apart over next week’s Budget and we all prepare for the worst, it is a high price that we are all now paying for the Brexit folly.

Public services and the overall economy are suffering from the Brexit effect, so it is therefore perfectly legitimate to ask ourselves whether it’s worth it. The public gets it with polls suggesting that less than 30 per cent of the public would now back the move.

With the Budget looming, surely it is beyond time for Westminster to face up to the consequences of its decisions on a hard Brexit. Labour cannot be blamed for Johnson’s policy failure, but by refusing to do anything about it, they now own it and its consequences.

It’s a statement of the bleedin’ obvious that Brexit is costly, bad news, and one that the public, business and the rest of Europe understand. You don’t need James Carville to tell you… it’s the Brexit, Chancellor.

Stephen Gethins is the MP for Arbroath and Broughty Ferry