Is Brexit to blame for the UK's problems? Guests Robert Colville and Julian Jessop discuss the short-term damage caused by Brexit, such as friction with trading partners and political uncertainty. However, the long-term harm is uncertain. They explore the impact on the UK economy, debunk myths surrounding Brexit's negative effects, and highlight the need to seize opportunities. The podcast also delves into Brexit's effects on political stability, the future of reconciliation, and the rise of the canist state.
Political uncertainty caused by Brexit has hindered business investment and made decision-making more difficult.
The negative impact of Brexit on the economy has been less severe than feared, with overall net migration remaining high.
To unlock growth potential after Brexit, the UK should consider tax cuts, investing in infrastructure, and improving regulatory framework.
Deep dives
Brexit has contributed to political uncertainty and a lack of stability in the UK
Brexit has resulted in a churn of prime ministers and ongoing political rouse, which has affected stability and made long-term decision-making more difficult. This political uncertainty has hindered business investment and created a risk premium on UK assets.
Brexit's impact on the UK economy has been less significant than anticipated
While Brexit has increased trade barriers and introduced new obstacles to free movement, the negative impact on the economy has been less than feared. The UK has seen a reduction in cheap labor from Europe, allowing for a shift towards higher skilled workers. Despite some sector-specific challenges, overall net migration remains high, and Brexit has not been a major factor behind labor shortages. The impact on inflation, trade, and the labor market has also been less severe than predicted.
Focus should shift to policies that promote economic growth
To unlock growth potential, the UK should consider tax cuts that boost the supply side of the economy, such as reducing corporation taxes and addressing high marginal tax rates. Investing in infrastructure, improving the regulatory framework, and resolving the housing shortage are also important areas to promote growth. Political stability and a long-term focus on productivity, wages, and investment are necessary to achieve tangible benefits after Brexit.
Brexit's long-term impact and public perception
While Brexit may continue to be debated by some, over time it may become less relevant in the daily lives of most people. Die-hard supporters and opponents may retain strong views, but for the majority, the focus may shift toward other pressing issues. However, Brexit's legacy within the UK and public perception may endure, especially related to stability, political uncertainty, and economic effects.
The need to move forward and prioritize growth-oriented policies
It is crucial for the UK to move beyond Brexit and concentrate on enacting policies that enable growth. This includes fostering stability, implementing tax reforms to enhance competitiveness, driving investment in infrastructure, and boosting productivity. Overcoming risk aversion and embracing long-term strategies will be key in positioning the country for sustained economic development and success.
On this week’s Merryn Talks Money, host Merryn Somerset Webb poses the question of whether Brexit has actually harmed the UK economy as much as some may think.
The answer is discussed by her guests: Robert Colville, director of the Centre for Policy Studies, who voted for the UK to remain in the European Union, and economist Julian Jessop, who voted for the UK to leave. They agree that—in the short term—it’s hard to argue there isn’t some damage, given the friction the UK has created between itself and one of its major trading partners. Brexit has also added to political uncertainty in the country over the last few years. But what’s less certain, they say, is how much harm has been done by Brexit.