Boris Johnson is not known for his strategic patience, but this week he tried to take the long view as the nation grappled with strikes, soaring inflation and squeezed wages. “I say this to the country as a whole, we need to get ready to stay the course,” he told the Cabinet.
That bid to lift our eyes to the horizon is reflected in a string of policy areas, where the Government has set targets for delivery by 2030 (which the eagle-eyed among you may have spotted, is a deadline way after the next election).
On Brexit in particular, Downing Street stressed this week that it was “too early to pass judgment” on whether that historic shift in the UK’s global role was having a negative impact on the economy.
That quote reminded me of the famous quote by the late Chinese premier Zhou Enlai, who when asked about the influence of the 1789 French Revolution replied: “Too early to say.” Except in No 10’s case it felt not so much like cautious, historic wisdom but calculated political evasion.
Unfortunately for the Government, a new economic study out today suggests that Brexit isn’t just having an impact on the short term – but on the medium and long-term too.
The Resolution Foundation’s The Big Brexit report (a collaboration with the LSE, funded by Nuffield Foundation) provides the most detailed assessment to date of the ongoing impact of the UK’s Trade and Cooperation Agreement (TCA) with the EU.
The good news for the Government is that, contrary to some other studies, the report finds that the UK hasn’t seen a large relative decline in its exports to the EU that many predicted (although UK imports from the EU have fallen more swiftly than those from the rest of the world).
The bad news, however, is that we have suffered a sharp decline in trade openness (total trade as a share of GDP) since 2019, with a fall of eight percentage points. Competitiveness has fallen too.
The result makes for some pretty grim forecasts for 2030, the Government’s favourite timeline. The average worker in Britain was now on course to suffer more than £470 in lost pay each year by 2030 after rising living costs are taken into account, compared with the UK staying in the EU…