Finance: Research, Policy and Anecdotes

The clown leaves, the circus continues

When Boris goes, Brexit goes, some observers have noted.  But fear not, the Brexit soap opera will continue for many more seasons. I even would bet that one of the main protagonist, BJ, will continue to feature heavily, possibly as newspaper columnist spreading stab-in-the-back conspiracy theories and explaining to the world who prevented him from implementing the true Brexit.   But if anyone thinks that  the Tories would turn sensible and real world oriented, they will most likely be in for a ride, as after all the Tories are heavily invested in this soap opera as is the sycophantic press that supports them. To the contrary, we might see a further hardening of the Brexit stance under the next Prime Minister, with a passing of the NI Protocol Bill (which breaks NI Protocol, part of the UK Withdrawal Agreement, and thus international law) leading to a trade conflict between the UK and the EU.

 

There has been a clear downward trend in the quality of Prime Ministers since Gordon Brown left office in 2010.  David Cameroon embarked on the ill-advised austerity drive (which helped the Leave campaign win in 2016 by promising to recover public services with money ‘saved’ from EU contributions) and gambled the future of the UK with a Referendum that had only one objective: resolve an intra-Tory conflict that not many people cared about. While he had little of an ideology, his successor Theresa May did: an explicit hatred of anything foreign, ‘nicely’ summarised in her Citizens of Nowhere speech, copied from no other than the Master of fascist hatred, Adolf Hitler. Her attempt to schmooze with ultra-Brexiteers by drawing red lines (control over laws, border and money ) without any plan on how to go about it forced her later to back-pedal and led to her downfall, as hers was not the true Brexit. A failure on all dimensions, ‘pissing off’ everyone, including remain voters, EU citizens in the UK, ultra-Brexiters and the EU, without achieving anything

 

Enter Boris Johnson, the worst Prime Minister of the three and possibly in UK history, an incompetent liar, cheater and gambler with no beliefs but narcissistic self-confidence. Signing an international treaty that he never intended to honour, breaking the laws and rules he announces on TV and lying about it afterwards. I do not want to waste any more virtual ink on this despicable human being, but just note that there is no guarantee that the next PM will be any better and there might be a chance she will be worse; just think of Suella Braverman.  In any case, as in any good soap opera, we will now see a repeat of the 2019 Tory competition, where candidates will outbid each other on who is the most radical Brexiter in the country. More broadly, we will see the political conversation yet again turn completely inward, as it was between 2017 and 2019 during the Brexit negotiations, where the UK was so busy negotiating with itself that there was little space to actually negotiate with the EU.

 

As Janan Ganesh points out, the UK has become a tragicomic country. The best-case scenario is that it will economically (and politically) become a Mediterranean per capita income with northern European weather, as Janan argues. I would add that the worst-case scenario is that it follows the example of Argentina, the only country that went from being a high-income country to a middle-income country in the 20th century.  While this is certainly a rather long way off and might sound a bit too pessimistic, the damage done by the Conservative Party over the past 12 years will be hard to reverse. A UK return to Single Market and/or Customs Union seems off a couple of decades and not just because Labour does not want to open the debate on it, but also because it is hard to imagine that the EU will accept such an entry any time soon.

 

The UK is truly on a downward trend and it is hard to see when it will hit bottom. In the meantime for those of us who have left the UK, we continue to watch the soap operate with amazement.