Business

Big Brexit ship 'keeps drifting forward into uncharted territory'

'It has become perfectly clear since June 24 that no one knew what the ‘alternative Leave’ economic plan was' Angela McGowan argues, adding a Boris Johnson article on the matter was pulled

SO here we are, a mere two weeks after the UK’s EU referendum, with Northern Ireland’s economy (and indeed the UK’s economy) left in a very precarious state.

Roundtable discussions in the business community reflect concern (and even still some degree of disbelief) from every sector about how we have found ourselves in this position. It has become perfectly clear since June 24 that no one knew what the ‘alternative Leave’ economic plan was – not even the Leave campaigners themselves.

Boris Johnson attempted an article on the subject the week after the vote, but it was withdrawn by one of his advisors who then suggested that he was “tired” when he wrote it. When Michael Gove started talking about a model based on Albania, many people started to believe the UK had been sold, by some, as Lord Heseltine put it, a “deceitful pup”.

What is most extraordinary about the situation that we find ourselves in is the fact that, despite a widespread sense of regret, the big Brexit ship keeps drifting forward into uncharted territory.

One ITV Wales Welsh Political Barometer poll conducted last week by Cardiff University showed an almost exact reversal from a 53 per cent to 47 per cent ‘leave’ vote in Wales to a 53 per cent to 47 per cent ‘remain’ vote.

Professor Roger Scully, Professor of Political Science in the Wales Governance Centre at Cardiff University, explained: “When we look at the details of the results… there appears to be a small cohort of voters who voted to Leave, but who may now be experiencing what some in the media have termed Bregret.”

Unfortunately for the business community in Northern Ireland, firms both large and small and indeed from every sector are now being swept along by this political event, which is bringing them into stormy waters. We simply have to wait until a new UK Prime Minister is elected to see which direction we will be taken and indeed if any port can be identified in this self-imposed storm.

There are lessons to be learnt for the business community at this time. The untold story does not stop with the Leave campaign failing to identify their Plan B for the economy. Perhaps our business voice was not strong enough in spelling out just how critical our close relationship with the EU is to this economy.

Perhaps we in the business community could have been better at helping the public connect the strong relationship between the country’s living standards and the stable and advantageous trade relationship that we have had over the last 40 years with the EU.

We also could have done a better job in explaining to the public just how critical EU migrant workers are to the economy and how they make a positive fiscal contribution -paying in more taxes than they use up in public services.

The wider public across the UK should have been helped to understand the positive economic role that EU nationals play in our health care system. They are often the people who care for us when we are sick in hospital and undertaking really important scientific research in our local universities.

For example, it is scientists from across the EU that work collaboratively with local Northern Ireland researchers to find cures for every day diseases and they are supported in this work with EU funding from programmes such as Horizon 2020.

But this was not the picture that was painted by Nigel Farage in the run up to the EU referendum. He instead insinuated that EU nationals are nothing but a burden in the UK. He has now of course he has disappeared to “get his life back” and is probably still using his EU MEP pay to ensure that he does not suffer too big a dent in his own living standards.

When I was asked at one public debate at Catalyst INC how Brexit would impact the economy I replied that it would result in capital flight from the UK, a depreciation of sterling, reduced investment and that it would also be inflationary for households.

Owen Patterson MP and Kate Hoey MP were also on the panel that evening and both quickly jumped in with the usual “scare-mongering”. Mr Patterson sarcastically added “and the mice will start to run out of the taps”.

It was a hard battle for economists in the run up to the EU referendum trying to put economic realities to people who prefer soundbites and slogans over in-depth analysis. Michael Gove openly stated that he had “had enough of experts”.

But we are where we are, and if anything, we must accept that a large body of people across the UK are not happy with the status quo. In reality, people are really unhappy about the quality of public services, the supply of housing, terrorism and especially concerned about inequality. These are all issues that could be resolved by the national and devolved governments but for now the EU and migrant workers have been used as a scapegoat.

It is my view that the business community now has a responsibility to make their voice better heard on how we move forward. We need to be heavily involved in steering Northern Ireland’s position in this new and strange situation.

We have an obligation to publicly stand up for EU nationals currently working in our economy, and we have an obligation to ensure that any new deal struck between the UK and the EU keeps us as close to Europe as possibly.

The business community must stand firm to ensure there are no obstacles to all-island trade and we need to highlight that critical relationship that exists between flourishing businesses and the overall living standards of our people.

:: Angela McGowan is chief economist at Danske Bank in Northern Ireland

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