Brexit

Brexiteers! Stop boasting about the economy, it is bound to dip

Be realistic. Remain warnings were overdone. But we've been rather lucky since the referendum.

BY Iain Martin   /  28 November 2016

It is difficult to get the balance right in the great Brexit debate. As a Remainer does one call openly for a second referendum, or pretend to accept the result, work covertly to overturn it and greet every piece of bad news as a supposedly divine judgment demonstrating that we must stay in the EU or perish? On the Brexit side, my side of the fence, the temptation is quite the reverse, to overdo the optimism and hail every piece of good news as proof that all will be well in perpetuity. Or should one simply adopt the position of most voters by ignoring the whole business until there is a deal to assess?

Feelings are still running highest among the most fanatical combatants, however. Who seem mainly to be men. (Funny that.)

I’ve heard Remainers say that in voting to leave the EU Britain has voted for national suicide. That is – how can one put this sensitively – completely and utterly Bertie Bonkers. The UK is leaving a set of flawed arrangements that in their current form – the EU and specifically the Single Market – are less than 30 years old . Our move in another direction is hardly the fall of the Roman Empire. If it’s a mess to get out of these EU entanglements, then it merely shows we were daft to get immersed in the first place.

There is one area, however, in which some – I stress some – Leavers are making a mistake that will, almost certainly, this being life, bite them on the backside next year or the year after.


Subscribe to the Reaction Daily Email

Make sure you're not missing out on your free, daily Per Diem email & Iain Martin's weekly letter.


With so many predictions of immediate disaster, and instant recession, delivered by the Remain campaign before June 23rd turning out to be balderdash, some Leavers are determined to go on television and radio constantly and enjoy showing that the Remainers got it wrong. This is short-term tactical fun, but a longer-term strategic error. The UK – or the West more broadly – is probably overdue a recession or at least a nasty year or two. It is now seven years since the last one; asset price bubbles have been inflated to bursting point; some of Italy’s banks are in trouble; and political risk is everywhere you care to look. As a leading Leaver economist put it to me the other day: next year could be quite horrible on construction and consumer demand.

If anywhere powers ahead it will probably be the self-sufficient in energy (net exporter even) US, if it gets corporation tax down and reshores wealth to boost investment. In the ghastly, narcissistic Trump we must, on the question of economic growth, trust…

A Tory former cabinet minister and Leaver put it to me like this:

“It is silly. The British economy is bound to turn down at some point, it always does eventually. Economies do. There are bound to be companies that don’t like the uncertainty and withhold investment. Or the downturn may have nothing to do with Brexit, it may come from elsewhere. Brexit will get the blame, of course. But taking the credit for the good news now and saying everything is wonderful means Brexit will be easier to blame if or when there is a problem.”

Indeed, the panglossian approach merely risks greater reproach from the voters later. Being too bullish now – look, Brexit is blooming marvellous, there’s zero impact, it’s even good for the economy – also risks squandering one of the most important, and least discussed aspects of the referendum result. The orthodoxy is that voters will not vote against their own economic interests, that they will do what they’re told for an extra £100 a year. With Brexit, lots of voters trashed that orthodoxy. They looked at the warnings and considered self-government more important. They’re realists who know not everything will be wonderful. Far better to talk to them in a realistic fashion. The Remain warnings were overdone. But we’ve been rather lucky since the referendum and there will be some extremely tricky moments ahead.