Is Britain the “Sick man of Europe”?
As George Osborne put it in today’s Evening Standard, “Britain is in the slow lane.” The economy is moving slowly, while the government’s weak Brexit strategy and lack of clarity and direction are creating more uncertainty and anxiety.
In his editorial, Osborne’s newspaper was critical of the government and the recent antics of Boris Johnson: “This week the whole world has been treated to the shambolic spectacle of the cabinet negotiating with itself in public. Britain’s diplomatic mission to the United Nations in New York looks like something that Alan Ayckbourn could have written: the dishevelled foreign secretary who gives a press conference trapped in a hotel lift; the prime minister who’d rather have a meeting with Ivanka Trump than with Boris Johnson.” The article argued that the government was arrogant to think that it can decide on its own what it would like from Europe and expect them to say yes, while, at the same time, being unable to make up its mind about what exactly does the UK want from Brussels. As the title of the commentary attests, “We are paying a high price for the Brexit farce.” We have basically “gone from one of the strongest of the major advanced economies in the world to the weakest. The European economies we were told by the Brexiteers were basket-cases — like Italy and France — are now set to outpace us.”
Others have also come forward commenting on the government’s flawed and unstable strategy. Lord Tebbit, former Tory chairman told Radio 5 Live that the government’s biggest problem was the inability to agree on policy: “What is wrong is that there was not an agreed line which had been endorsed at the cabinet, having been fully discussed in a cabinet committee, on what people should be saying. If there is a song sheet, then you expect everyone to sing from it. But if there is not a song sheet, then people sing their own songs. I think that the leadership is not well-organised, that’s the thing.”
Economically and politically the situation is uncertain. The pound’s drop, the increase in the cost of imports, higher inflation and a squeeze in real incomes, aren’t reasons to cheer. It is tragic and unfortunate to see the same people who voted for Brexit, because they felt marginalised, to be struggling due to the fall in their living standards.
It is also sad to see that the UK is lagging behind other European economies. While global economy and the Euro area are growing, the UK economy is slowing down.
According to the Organisation for Economic Co-operation and Development’s (OECD) latest Interim Economic Outlook, the world economy is picking up momentum as investment, employment and trade support are growing across most countries. Projections show that the “global economy will grow by 3.5 percent this year and 3.7 percent in 2018, with industrial production and trade picking up and further acceleration in the rebound of technology spending.” The Euro area will grow at a 2.1% rate in 2017 and a 1.9% in 2018. Germany, France and Italy are all expected to grow, while the UK is expected to continue its growth slowdown through 2018. As the report said: “The unemployment rate has fallen to below 4.5%, but weak productivity and real wage growth persist. The depreciation of the sterling has modestly improved export prospects but also pushed up inflation. In this environment, the UK is projected to grow by 1.6 percent in 2017 and 1 percent in 2018.”
Conservative MP Nicky Morgan explained that Brexit was indeed having an effect on the UK economy: “We have been hearing for some time that business investment has been slowing down and today’s OECD report bears that out and crystallises the fears that many of us had about Brexit dragging down our economy.” And Lib Dem leader Vince Cable, mourned the fate of Britain: “Brexit is set to turn Britain into the sick man of Europe again.”
Open Britain, a cross-party, grassroots campaign which supports the view that Britain will be stronger within Europe, also commented on today’s OECD forecasts. Wes Streeting MP, leading supporter of Open Britain said: “The hard Brexit enthusiasts at the heart of government seem determined to reclaim Britain’s title as the ‘sick man of Europe’. A combination of falling real wages, stalled investment and the prospect of new trade barriers between the UK and our largest market, is clearly taking its toll. And at the heart of this is the uncertainty and anxiety caused by the Government’s flawed Brexit strategy.”
Solutions about the uncertainty surrounding the future of the UK, both in terms of its economic outlook and political stability are what the Conservatives want to hear from the Prime Minister’s speech on Friday. It is such a commitment to long-term solutions, especially access to the single market and customs union, that will bring the government’s dissenting voices into some form of dialogue and reconciliation, while putting to rest the nostalgia of the Brexiteer club.
It feels sad and disappointing that Britain is now characterised as the sick man of Europe. While it had been described as the sick man of Europe in the 1960s and 1970s by foreign and domestic critics due to its weak economic performance, the devaluation of the pound in 1967 and the Winter of Discontent 1978-79, with the darkest event being the IMF bailout in 1976, one would think that such a characterisation is of the past. If this is the past that many of us, having drunk out of the Brexiteer’s chalice, dizzyingly crave, and want to resurrect, we should consider soberly the negative economic effects of Brexit, and take with a pinch of salt the flatteries of the Johnsons and the Farages.