Brexit: ironies

10/08/2019

I wonder how many people appreciate the irony. There are the MPs swanning off on their jollies and not due back until 3rd September. Meanwhile, the hired help have had their leave cancelled until 31 October.

These are the special advisers who were e-mailed by Johnson’s senior adviser Edward Lister on Thursday night, saying there was "some confusion about taking holiday".

With that, they were told none should be booked until 31 October, with compensation considered "on a case by case basis" for those who had already made bookings. Graciously, however, the advisers have been told they were free to spend their weekends as they wished.

"There is serious work to be done between now and 31 October and we should be focused on the job", the email said, leaving some seriously unhappy bunnies in its wake, complaining that "staff are exhausted and are facing an unprecedented workload in September and October".

Apparently, one recipient described the email as "posturing", claiming that the spads were being used as part of the PR war to convince the public the government is serious about no deal.

That, in itself, is an interesting observation. The e-mail is being taken as yet another sign that Johnson is planning an early election, so there is an outside chance that this is bluff. But it seems an odd way of going about it and runs contrary to all the other signs.

Not least, Downing Street is refusing to deny that a snap election would need to take place in the first few days of November if MPs forced a vote of no confidence. Instead, the usual mantra is being trotted out, reiterating that in Johnson "would ensure the UK had left the EU on 31 October".

The instruction to cancel holidays, however, brought a response from Michael Gove - a particularly inane comment, to the effect that he didn't want to see a general election in the autumn.

"I believe it is important that we get on with delivering Brexit and also ensure that the other opportunities that the prime minister has made clear that he wants the United Kingdom to enjoy can be provided", he said.

"That's why we are concentrating not just on making sure that we leave in good order on 31 October, we are also making sure that there is investment in additional resources for the NHS, more police on the streets and also ensuring that our education system across the United Kingdom gets the extra investment that it needs as well".

This brings on another dose of irony, as these "opportunities" are precisely the clickbait which point to an early general election that Gove says he doesn't want to see. And with a notional majority of one, the Tories desperately need an election – and for that, they need to neutralise Farage.

Raining on his parade earlier in the day, though, was George Freeman, currently transport minister (pictured) – but perhaps for not very long.

He "hit out" at calls from "hardliners" for the UK to stay on WTO terms, stressing that, while no-deal was a "legitimate threat" for negotiations, failure to reach an agreement in the long term would be so chaotic it could keep the Tories out of power for decades. He also suggested that dissolving parliament for an election over the Brexit date would be a "huge mistake".

That earned him a furious rebuke from No 10, leaving a chastened minister who quickly fell into line. "The PM has repeatedly set out his desire for a deal and our willingness to negotiate with all energy, but if the Commission is unwilling to negotiate, then we will still leave on 31 October", he said in a statement. "I firmly support the Prime Minister and his approach".

Also putting the boot in was chancellor Sajid Javid, who added to Freeman's pain, insisting he was not "frightened" of leaving without a deal and the UK could end up "stronger and more resilient".

This is the same chancellor who visited the National Grid, only to be rewarded with a nation-wide power failure after problems with two generators. The coincidence is another of those ironies.

Otherwise, the chancellor was quite busy explaining that the downturn in the last quarter's GDP "don't mean nuffink" and we're still headed for the sunlit uplands. But this didn't stop the Guardian declaring that, "with Britain on the cusp of recession", the "doomsters" may be proven right.

"Brexit uncertainty", the paper says, "has acted like a handbrake on business activity and dictating corporate caution". GDP has contracted in the three months to June by 0.2 percent, "the first decline in a quarter since 2012 when the nation risked a double-dip recession amid the weak recovery from the financial crisis".

Should the economy fail to do anything more than stagnate in the third quarter, we are told, a technical recession would be confirmed. Economists, the paper then says, "reckon there is a one in three chances of such an outcome, even if the UK avoids leaving the EU without a deal".

Despite that, the National Institute of Economic and Social Research expects growth will likely return in the third quarter. But the Guardian has no time for such optimism. A lack of positive momentum and recent business surveys, it tells us, "suggest output could falter again".

On the other hand, Sajid Javid is quick to find non-Brexity causes for the drop in GDP. It's all down to "challenging conditions in the world economy", we must believe. And if we really believe, we will find that Britain will outpace EU rivals such as Germany and Italy this year. So there.

Needless to say, Javid gets plenty of support from the Telegraph which offers a diet of unwavering optimism. In a sense, it tells us, the contraction is not a surprise. After the surge in growth in the first quarter, "economists universally expected a slowdown".

And if the scale of the stumble was not anticipated, the UK is "probably not" headed for a recession. The immediate outlook is one of choppy growth; the surge of stockpiling followed by retrenchment seen in the first and second quarters may well happen again. And in technical terms, that means no recession. The R-word requires two consecutive quarters of contraction.

Elizabeth Martins at HSBC thinks that the scale of the slowdown in the fourth quarter will depend on the terms of the UK's exit from the EU. Assuming the country avoids a no-deal Brexit, she forecast a final quarter print of 0.1 percent. But, she concedes, "a disruptive no-deal Brexit could mean another negative print".

But fear not, the economy has underlying strengths. Employment keeps hitting new records. Unemployment is at its lowest since the 1970s. Wages are growing at the fastest pace in more than a decade.

Those factors all provide a solid foundation for a return to growth. Consumption is the biggest chunk of the economy, so more jobs and more pay can fuel spending without households borrowing more. Even business investment, which is falling steadily, is not suffering the freefall seen in previous recessions.

We're back, it seems, in yesterday's territory, where we see newspapers acting as the standard-bearer for their own coterie of groupthinkers, "each keeping their respective mantras alive as they distort the news for their own purposes – or, as the case may be, selectively omit vital information which does not support their cause".

The Guardian wants a Brexit-related recession, so that's what it will have. The Telegraph, backing its favourite son, doesn't want a recession, so when it looks at the issues it finds that there will "probably not" be a recession.

The irony here, though, is that even this paper can't gloss over Elizabeth Martins' "negative print" if we have a disruptive no-deal Brexit. And since Johnson is absolutely determined that that is what we should have, it looks as if we're headed for a recession. George Freeman may have the last laugh. And that would be ironic.