With Brexit, the UK has reached the gold standard of self-harm | William Kegan


IIn my last column, I suggested that Brexit is the greatest act of self-harm inflicted on the British economy since returning to the gold standard in 1925. Even arch-Brexiter Jacob Rees-Mogg recently admitted that implementing the next step in the Brexit bureaucracy would be an “act of self-harm”. I did not invent this.

As Minister for Brexit Opportunities, he has the sisyphean task of seeking out such opportunities. One of the few proposals he is said to have proposed is the possibility of abandoning EU rules on the manufacture of vacuum cleaners, thus making them more powerful and less environmentally friendly. I’m not making it up either.

Why does the cartoonist’s favorite character Lord Snooty have such problems? The answer is starkly obvious to him and to British businesses: Brexit is proving to be an absolute disaster and is having a seriously deleterious impact on the economy. This compounds the inflation problem and has such a drastic impact on output, and therefore living standards, that the Organization for Economic Co-operation and Development predicts that the UK will be the economy next year worst performer in the G20 other than, uh, Russia.

Our redoubtable prime minister – still in place as we write – talks about growth and investment. But the truth is that investment has crashed under Brexit, a development that is hardly a signal for growth.

As the saying goes, “those whom the gods want to destroy, they first drive them mad”. When the Conservative chairman of the Commons Defense Committee, Tobias Ellwood, recently pointed out that the response to repairing the economic damage the UK has inflicted on itself, as well as the otherwise intractable problem of the protocol of Northern Ireland would join the single market, he was booed by fellow Tory MPs. And Labor is completely cowardly in refusing to tackle the Brexit issue head-on.

The Brexit Squad, and those who fear it, must get it into their heads what Lord (Charles) Powell, Margaret Thatcher’s closest adviser for many years, reminded his audience at a meeting the last week from the Wimbledon Philosophical Society.

He said that at no time, despite all her frustrations with the EU and her many battles (which she won!), did Thatcher ever want to leave the EU. Unfortunately, his so-called eurosceptic followers have misunderstood or distorted his opposition to centripetal tendencies in the EU. They were too naive to realize that after a combination of the work of Thatcher herself and Prime Ministers John Major and Gordon Brown (especially when the latter was Chancellor), the UK benefited, in the words of George Soros, ” the best of both worlds” in joining the EU.

Sadly, the Brexiteers managed, with some trickery, to trick a slim majority of those who voted in that fateful referendum into opting to leave.

Now back to the return to the gold standard in 1925. The economic significance of this was that it involved a gross overvaluation of the pound and had a drastic impact on our exports and production, thus aggravating the unemployment crisis of the 1920s It was a decision that Winston Churchill, Conservative Chancellor in 1925, regretted for the rest of his life. However, this did not improve the fortunes of Ramsay MacDonald’s Labor government of 1929–31.

But, but, but… it was reversible. Events in the foreign exchange market forced the UK to abandon the gold standard in 1931, under what was then the national government. Labor politician Sidney Webb then said: ‘No one told us we could do this.

Brexit is also reversible. It is not good Lord Mandelson to advise Labor that its effects can be ‘softened’; or believe that Labour, if elected, can “make Brexit work”. Brexit does not work, and it is not clear that it will ever work.

Commentators keep asking: what is Labour’s plan? Well, I can come up with a plan: Labor should take the ball and run to an open goal. He should highlight every day the damage Brexit is inflicting on this blind country, and the reasons why: Brexit Tories! (This damage is manifested, among other things, by the recent fall of the pound. There is a difference between the harmful effects of an overvaluation of a currency, à la 1925, and a fall like the current one, which impoverishes the nation .)

Labour’s approach to Brexit appears to be, in Suetonius’ words, “to hurry slowly” (“slow party”) towards a rapprochement with the EU. In my opinion this should hasten quickly, while Johnson’s reputation, like that of Hemingway’s bankrupt The sun also risesgoes bankrupt “in two ways: gradually, then suddenly”.


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