Thursday 24 January 2019

I don't want to say "I told you so" again

On the eve of the 2016 referendum, I predicted that withdrawal from the EU would not cause the UK economy to fall off a cliff. There would rather be a barely noticeable but inexorable decline in investment*. Here is part of one of my posts:

[There are few facts.] Anything else the "Remain" or "Leave" campaigners say about what might happen after "Leave" is successful is speculation. However, it is safe to assume that inward investment, which has hitherto been attracted, to Wales and the English regions in particular, by our membership of the common market, would decline. The UK would probably not immediately fall down an economic cliff, contrary to the journalistic claims of some the "Remain" leaders, but the prospect is of a tailing off affecting our children and our children's children.

It should also be pointed out that £350m a week would not become instantly available on June 24th to spend on the NHS and all the other things promised by Vote Leave in their provisional budget (no mention there of the cost of increased border staff, by the way). Negotiation to untangle our relationship with the other 27 nations would almost certainly take the full two years stipulated by the current Treaty and final exit could be delayed until 2020. So we would still be making a contribution to the EU budget for years to come, Since this is based on three factors, all dependent on economic activity, this may come down from 2015's £8.5bn (£163m/week), but then so would much of our own government's revenue which is also dependent on a thriving economy.

So Airbus chief executive officer Tom Enders' last-minute warning sadly comes as no surprise:

European planemaker Airbus has warned that it could move wing-building out of the UK in the future if there is a no-deal Brexit.

The firm's chief executive, Tom Enders, said the firm "will have to make potentially very harmful decisions for the UK" in the event of no deal.

Mr Enders said it was a "disgrace" that businesses could still not plan for Brexit.

In all, Airbus employs 14,000 people in the UK.

That includes 6,000 jobs at its main wings factory at Broughton in Wales, as well as 3,000 at Filton, near Bristol, where wings are designed and supported.

Mr Enders said: "Please don't listen to the Brexiteers' madness which asserts that, because we have huge plants here, we will not move and we will always be here. They are wrong."

The Standard also repeated news of other imminent departures:

Sony said it would transfer its European HQ from the UK to the Netherlands to avoid disruptions caused by Brexit.

And appliance maker Dyson announced it was moving its headquarters to Singapore, from Malmesbury in Wiltshire, although it said the decision had nothing to do with Brexit.

The Dyson move may not be directly inspired by Brexit, but the company will no doubt take advantage of the free trade agreement Singapore has with the European Union.

  *Minister George Hollingbery's sanguine statement in the House this morning that UK remains the most favoured nation in Europe for foreign direct investment (FDI) is based on data up to 2017. The trend in 2018, which showed France catching us fast, may lead to a different story this year.

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